On March 1, the Biden administration published its trade policy agenda. How does it hold up to the expectations, and what future trade course can we expect? Four of our trade policy experts weigh in with their opinion.

Emily Benson – Putting trade policy in the context of U.S. economic policy

What were your expectations for the Biden Administration’s trade policy agenda?

The Biden Administration has gone to great lengths to reaffirm that the American people will be their first priority. This commitment to a domestic manufacturing base is reflected in Biden’s “Buy American” Executive Order.

In terms of international relationships, Biden has repeatedly underscored his commitment to allies and the global trade system while remaining noncommittal until possible trade agreements have been thoroughly analyzed in terms of their effects on American workers and the U.S. manufacturing base.

Because he is an internationalist and has close personal relationships with leaders around the world, President Biden, unlike his predecessor, is starting from the standpoint that foreign countries are potential partners rather than existing adversaries.

Therefore, Biden and his team will work diligently to restore U.S. leadership within international organizations, including the WTO, while strengthening policies that Katherine Tai has called “worker-centered trade.”

How did the President live up to them?

The Biden Administration’s trade agenda very closely mirrors what was promised throughout the campaign. The top three issues of importance are: tackling the pandemic and getting the economy back on track, making workers a focal point of trade policy, and prioritizing climate policy in international trade.

Another trade agenda theme is the return to “normalcy” in international trade relations. In its trade agenda, the Biden Administration underscores its commitments not only to allies but to the rules-based international trade system.

The Biden agenda decries the “erratic” trade plays of the Trump Administration and seeks to restore predictability for consumers, businesses, and international partners alike. At the very least, this signals a certain level of reassurance for the E.U. that new tariffs, for example, on automobiles, will not materialize.

However, it remains to be seen to what degree the Biden Administration will work to undo or reverse many of the harmful policies of the Trump Administration, including steel and aluminum tariffs.

What does it tell us about the U.S. future trade policy?

The takeaways from the new trade agenda underscore that the United States is back at the table and willing to negotiate and cooperate with international allies on a number of issues.

However, President Biden, born and raised in the former steel town of Scranton, Pennsylvania, is taking an approach that clearly prioritizes U.S. workers and the manufacturing base, a voting group from which he painstakingly sought support during his campaign.

Another key takeaway is that, for allies seeking to engage the United States, a viable launchpad for negotiations will be climate policy. For those seeking to sign new trade deals or resolve existing disputes within the WTO system, prioritizing climate policy within existing trade frameworks will make it easier for the Biden Administration to sell trade to its constituents, including progressive Democrats who support the Green New Deal.

Christian Bluth – U.S.-EU trade relations

What were your expectations for the agenda?

Biden doesn’t see Europe as a threat, as President Trump did. Quite to the contrary, he sees Europe as an ally and hopes for the E.U. to engage with his agenda, particularly with his geoeconomic agenda with regards to China.

The U.S. has frequently accused Europe of talking the good talk but not doing enough when it comes to concrete actions. Biden will likely make it clear that a deeper US-EU partnership does not come without a price.

Next to trade, it is also interesting what he is going to announce on climate policy. He has already made it clear that he intends to return to the Paris agreement. How he engages with the E.U. on questions that relate both to climate and trade, such as the pricing of carbon emissions or international rules on subsidies, be it for fossil fuels or greening the economy, is also going to be closely watched by E.U. policymakers.

How did the agenda live up to them?

Yes, it pretty much confirms expectations. This is true in particular regarding China, where the agenda mentions increased efforts to work with allies, which of course, includes the E.U.

Climate and the transition to clean energy are frequently mentioned in the agenda, but it doesn’t outline any specific action in regards to Europe. This is an area in which we will need to see more detail soon.

Interestingly, the agenda also includes an emphasis on enforcement of trade rules, something that is also found in the recently published E.U. Trade Policy Review, the E.U.’s new trade strategy. While I don’t believe this to be intentional, the U.S. and the E.U. might give increased importance to rules-based trade by focussing more on enforcing existing rules.

What does it tell us about the U.S. future trade policy?

The agenda makes it clear that trade has to serve the interests of the American people. That is its primary objective. In addition, it places a strong emphasis on sustainability concerns and on strengthening and enforcing rules-based trade. This is quite close to the objectives found in the E.U.’s new trade strategy, which calls for a more “open, sustainable and assertive trade policy.” The alignment of the U.S. and E.U. on these issues is noteworthy and meaningful.

To what extent there is alignment between the E.U. and U.S. on controversial Chinese trade policy issues is not yet clear. There is certainly a willingness to work more closely on both sides. How fruitful such a collaboration can be is impossible to foresee at the current juncture.

Cora Jungbluth – U.S.-Asia trade relations

What were your expectations for the agenda?

Asian allies hope for the U.S. to pay more and broader attention again to the Asia-Pacific region under the new administration. Joe Biden could pick up on these expectations and highlight prospects of closer economic cooperation with Asian countries besides China.

China, of course, is a must-have in the speech. Biden’s China policy is expected to contain both Trumpian elements (“tough on China”) and Obamanian Elements (bilateral diplomatic relations). The speech could give some hints as to in which direction Biden will pivot more.

That said, Biden will most certainly not go back to his early-campaign stance on China, downplaying its role in geo-economics and -politics. 

How did the President live up to them?

It’s worth it to note that the Asian-Pacific region (except China), is not mentioned in the President’s 2021 Trade Policy Agenda, even though the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) deserve more attention from the U.S. administration.

The region as a whole remains a blind spot on the agenda for now, albeit some Asian countries, such as Japan, are part of the group of  “like-minded countries” and thus mentioned implicitly at some points in the document, e.g., when it comes to dealing with China.

China, as expected, is mentioned prominently with its own section entitled “Addressing China’s Coercive and Unfair Economic Trade Practices Through a Comprehensive Strategy.” While this rhetoric strongly resembles that of the Trump administration, the approach to tackle the China issue is neither Trumpian nor Obamanian.

The Biden administration plans a systematic approach to trading with China as part of their overall China strategy, hinting at the inefficiency of the “piecemeal work” of their predecessors. This includes expecting “friends and allies to pressure the Chinese Government to end its unfair trade practices and to hold China accountable, including for the extensive human rights abuses perpetrated by its state-sanctioned forced labor program.”

What does it tell us about the U.S. future trade policy?

The Biden administration will apparently not take up Obama’s “pivot to Asia” in their relations with Asia, but rather “pivot” towards like-minded countries, no matter in which region, to achieve a coordinated approach towards China’s trade practices. It is hard to say at this point which role the Asia-Pacific region as a whole will play. Still,

It also has become obvious by now that U.S. trade policy will remain “tough on China.” So this definitely is a heritage of the Trump era and appears to be a bipartisan consensus. The U.S. will expect its allies to follow or at least support this approach. Tensions with the E.U., which actually does not want to be caught in the middle between the U.S. and China, could arise from this.

Thomas Rausch – U.S. multilateral trade policy

What were your expectations for the agenda?

My expectations were low. It is certainly true that President Biden differs sharply – and in a positive way from his predecessor on international affairs, including international trade. Most importantly, he realizes that trade deals or institutions do not have to be win-lose but can also be win-win.

However, that does not mean that he will announce a new era of multilateral trade relations or a push for WTO reform. It would raise the already high expectations to a sharp departure from Trump even further and make congressional confirmation hearings for his USTR (Katherine Tai – meet the next U.S. Trade Representative (ged-project.de) and secretary of commerce even harder.

So, I expected some fluffy pudding about the importance of multilateral trade without any crunchy policy bits in it.

How did the President live up to them?

The agenda even underperformed my expectation. The fluffy pudding proves to be rather thin. While the Biden administration vows to assume a leadership role in the WTO and work with its new Director-General, the commitment to trade multilateralism is very weak. In fact, there is not even a specific reference, let alone a section, on multilateralism in the agenda, only a few casual and implicit remarks under “Partnering with friends and allies.”

What does it tell us about the U.S. future trade policy?

At first glance, the basic idea seems to be: We will work with our friends and allies in bilateral and regional agreements to achieve our trade objectives. It is “America First,” “Allies Second” (which is different from the Trump administration!), and “Multilateralism…, well, we’ll see” (which is not so different from the Trump administration!)

At a second glance, there are a lot of priorities that demand multilateral collaboration. If you want to make progress on labor or sustainability standards or improve the adherence trade to rules, you eventually need to reach out beyond your friends and turn to multilateral solutions with your foes. So, at best, the agenda might be a “Getting your friends in line, first” to “Tackle your foes together with them, second” approach.

In the end, actions speak louder than words, or: The proof of the pudding is in the eating.

Conclusion: What does it all mean for European trade policymakers and companies?

  • Do not expect too much from the new Biden administration
  • Pressure from the U.S. could even increase when it comes to taking a common approach towards China. The E.U. might not be able to duck away anymore but might be forced to choose sides – a thing the Union desperately wants to avoid.