After taking a backseat for years, U.S. trade policy has made its way back into the spotlight. The Trump administration challenged previously held orthodoxy around liberalization, instead using tariffs and trade wars to try to balance trade deficits and expand manufacturing positions in the United States. Now, President Joe Biden will inherit an ‘America first’ policy with both positive and negative consequences. And those of us in the business of importing, exporting and handling the logistics are waiting to see what he’ll do with it.
So, new president, new trade policy? Maybe not. Instead, Team Biden’s actions suggest that his priority will be supporting labor domestically, not liberalizing trade. Less than one month into his first term, President Biden has made a few moves that suggest an approach surprisingly similar to his predecessor. Here are a few of them:
Made in America - One of Biden’s first executive orders following his election was a ‘Buy American’ provision, requiring the federal government to buy more domestically produced goods. The order also strengthens the definitions of American made products and makes it harder to issue waivers to buy certain products overseas.
China - Perhaps one of his more infamous policy decisions, President Trump initiated tariffs on more than $300 billion in Chinese imports in 2018. Despite having signed a ‘phase one’ deal at the beginning of 2020, a trade war between the two countries is still ongoing. As of publication, President Biden has chosen to leave tariffs on Chinese goods in place. Several of his nominees have also voiced support for a ‘tough’ stance on China.
Section 232 Tariffs – Such investigations are administered by the Department of Commerce to determine the impact of particular imports on national security. Historically, they have focused on oil and petroleum. In 2017, the Trump administration initiated Section 232 investigations around steel and aluminum, ultimately determining that imports of those products harm national security. President Biden is letting those investigation results stand, meaning that tariffs on certain aluminum and steel products will remain for the time being.
Nominees - President Biden’s nominees for Secretary of State and Commerce Department head have both vowed to take a tough stance on China (that doesn’t usually translate into trade liberalization!). And incoming US Trade Representative Katherine Tai recently told the National Foreign Trade Council that the Biden Administration aims to have a ‘work-centered trade policy. ‘U.S. trade policy must benefit regular Americans, communities, and workers. And that starts with recognizing that people are not just consumers. They are also workers and wage earners.’
World Trade Organization - This is one area where we probably will see a departure from the 45th administration’s approach. President Trump was openly critical of the WTO, and even brought the NGO’s appeals process to a halt by blocking judges in its Appellate Body. Now the United States will have to decide whether to cooperate with or abandon the WTO altogether. Analysts believe that President Biden will bring the United States back into the fold.
Sympathies are shifting away from free trade and globalization and towards Made in America (at least in the White House). Although a Biden presidency is less likely to antagonize traditional United States allies, the glory days of free trade could be coming to a middle - So stay tuned!
As we learn more about this at Able Freight, you’ll find out too. We are here to support you in navigating through the changes as well as making sure the logistics of your sensitive products is handled professionally and with the highest dedication and in-depth know-how in place!
Your Able Freight Team
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