What Will the Election Bring on Trade?

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I sometimes think, probably erroneously, that Washington’s trade reporters get together each week and decide what they’re all going to write about. That seems to have happened recently when I started getting calls about the difference between the Biden and Trump trade policies and what each would do if he won. Fortunately, answering those questions is a lot easier than forecasting the election winner. The short answer is what you’ve seen is what you’re going to get. Both men have been in office for one term, and the most realistic prediction is that each will provide more of the same if he wins. Of course, things are not really that simple; plus, I have 700 words to go, so I will elaborate on that forecast.

First, let’s look at Biden. There is a theory that appears every four years that says a president’s second term will be different from his first. He can’t run again; this was most likely his last campaign, so he will be governing for the history books and not the next election. On trade issues, one can argue that was largely true for Obama’s second term. For Biden, I think it will not be true. I have argued from the beginning that his administration’s trade policy has been based on politics, namely a desire to avoid another intraparty battle between progressive and centrist Democrats, as happened with the Trans-Pacific Partnership in 2015–16. His officials have constructed a narrative to justify what was essentially a political decision (a “trade policy for the workers”), but as we say where I grew up, that’s just putting lipstick on the pig.

The reality is that, while the public continues to broadly support trade, the politics within the Democratic Party have not changed much. The two branches are still there and are still at odds. That means the administration’s trade policy, if it is returned to office, is likely to remain the same. That does not mean it shouldn’t change, but this column is about reality. I’ll get to fantasy another week.

With respect to Trump, trade is one issue where he has very strong fixed views which have not changed since the 1980s. He also has a history of making a real effort to deliver on his campaign promises. So, when he threatens an across-the-board 10 percent (or more) tariff and 60 percent (or more) tariffs on China, we should take that seriously. His four years in office were characterized by a focus primarily on a single metric—U.S. bilateral trade balances. If the United States had a big deficit, the other country became a target.

He also seems to have a single tool—tariffs—which are for him a remedy to all trade problems. He is convinced that foreigners bear the brunt of these tariffs, despite numerous studies showing that most of them end up being paid by Americans.

Trump’s use of tariffs and Biden’s continuation of them, along with the latter’s support for stricter “Buy America” provisions, have led some to conclude that their trade policies are the same. There are similarities, but their actions were taken for very different reasons. Trump’s trade policy is based on victimization and unilateralism. He believes that foreigners have taken advantage of the United States for years by flooding the country with imports, stealing our jobs, eroding our manufacturing base, and compromising our security. He believes that his predecessors failed to do anything about these challenges, and he is determined to fix the situation by himself. While he is not averse to trade agreements—he initiated negotiations with the United Kingdom and Kenya—his tactical approach, as demonstrated with South Korea, Canada, and Mexico, reflects a zero-sum mentality—he doesn’t win unless you lose.

Biden, in contrast, does not describe the United States as a victim, seems comfortable with win-win outcomes, does not base his policy on trade deficits, and has a long record of multilateralism, even though he, like Ronald Reagan, does not always practice what he preaches. His “protectionist” actions have been either the consequence of overwhelming bipartisan political pressure to be tough on China or to further his oft-stated goal of bringing jobs and manufacturing back to the United States. The China tariffs remain because there is no politically acceptable way to remove them. He touts “Buy America” not to get even with foreigners but to create more and better jobs in the United States. He does not pursue trade agreements because his left wing opposes concessions on market access.

China unites Trump and Biden. It dominates every conversation about economic policy or national security. Even there, though, while their actions are similar, the rationales are not. For Trump, China is part of his story of America as victim, and his focus, as on so many things, is getting even. Biden’s view of China is more nuanced, seeing it as a new kind of challenge that requires old as well as new and more creative tools to meet it.

The two bottom lines are that both end up in much the same place, particularly with respect to China, but they travel different roads to get there. Both will continue down their own paths if reelected. What you have seen is what you will get. Whether that serves the country well will be a topic for another time.

William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.