Biden Will Look to Build Consensus on Trade

Jan 8, 2021  | 3 min  | Ep4621 | Podcast

Podcast

Critics charge the Trump Administration has “no strategy” to its China trade policy, but last month President-Elect Joe Biden signaled he would not immediately scrap the Phase One Deal with America’s largest trading partner, favoring a full review while targeting Beijing’s “abusive” practices.

But some claim the outgoing President’s team may have dealt Biden’s trade representatives a strong hand to play in ongoing negotiations.  The Wall Street Journal reports while tariffs between both nations remain elevated, agricultural trade with China increased last year.  And though woefully off-target from China’s pledge to purchase $200 billion in overall U.S. goods by the end of 2021, financial pundits say Trump showed a China trade crackdown doesn’t have to result in catastrophic economic fallout.

On the campaign trail, Biden charged Trump’s trade wars have hurt American farmers.  In the coming weeks, trade deals like Phase One and USMCA will undergo scrutiny as power changes hands in Washington.  Biden is expected to pursue a multi-lateral rebuild of U.S. leverage abroad by mending fences with traditional allies in Europe and Asia.

After taking office in 2017, President Trump pulled the U.S. out of the Trans-Pacific Partnership, the massive trade agreement negotiated by the Obama administration and 11 other nations to check Chinese influence in the Pacific Rim. TPP was never ratified by the U.S. Congress.  

China picked up the pieces and signed the world’s largest trade deal last November.  The Regional Comprehensive Economic Partnership includes 14 Asia-Pacific countries and excludes the United States.  Some trade groups see potential for an American pivot back to Asia reminiscent of Obama-era foreign policy aspirations. 

Biden’s plan hinges on bolstering domestic industry through massive investment in energy and technology.  While the new slim Senate Democrat majority could add weight, some hope a dash of bipartisan consensus - born from fallout over civil unrest in D.C. this week – will tip the scales. 

For Market to Market, I’m Josh Buettner.

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