America has been mired in debates over protectionism and other trade policies for several years now, and it hasn’t shown many signs of slowing down. Will Joe Biden change things?
It was only late September when 3,500 American firms brought suit in the U.S. Court of International Trade, calling for an end to the Trump administration’s major tariffs on imports from China. Representing a diverse array of consumer goods, producers, and sellers, everything from Ford Motor Company to Walgreens, the petitioners argued that the “Tariff Man,” as President Trump has at times liked to style himself, did not justify the tariffs based on China’s abuse of U.S. intellectual property rights.
Of course, the U.S.-China battle was just one of Trump’s preferred trade-war skirmishes. There have been border taxes on steel and aluminum, tariffs on Canadian timber and French wine, and threats to impose tariffs on German automobiles. But that was then, so to speak. This is now. Will apparent presidential victor Biden reopen the gate to American prosperity and bring an end to this trade war era? Or, like Trump, will Biden turn out to be a protectionist at heart?
Biden has made it clear that he will promote buy-American purchases when the government goes shopping and that he will be tough on China while at the same time promising to reengage in multinational agreements. But for generations, trade wars have generally been motivated by presidential promises made to blue-collar workers. So, perhaps we should rephrase the question and ask where Biden, who to many voters represents a blue-collar ethos, stands with respect to organized labor.
Biden leaves no doubt on the matter of unions. On his BuildBackBetter.com website, Biden indicates that he will push for legislation to make it easier for workers to organize and bargain collectively, that he will call for a union-backed $15 national minimum wage, and that when it comes to bringing jobs back to America, he has a plan “to build a strong industrial base and small-business-led supply chains to retain and create millions of good-paying union jobs in manufacturing and technology across the country.”
When speaking about climate change, the Biden plan says he will “soon release updated proposals to meet the climate crisis, build a clean energy economy, address environmental injustice, and create millions of good-paying union jobs.”
So while Biden is not bashful about his union-label position, nowhere in his posted material is mention made of tariffs. Maybe, just maybe, that means the trade war era is coming to an end.
We received a hint in the way of a peace offering from Germany on Monday, when our bruised trade partner indicated that it intends to delay the imposition of retaliatory tariffs for a while. The tariffs on $4 billion of U.S.-produced goods were scheduled to take effect before the end of the year. German leaders also indicated they would be pushing the European Union to rekindle happier trade relationships with the United States. It seems as though one key nation wishes to give a new administration the chance to wipe the slate clean and let bygones be bygones.
U.S. trade wars have been harmful to America’s prosperity and have, for the most part, failed to deliver the promised protection to America’s manufacturing economy. While Trump’s tax and regulatory policies have been a boon to the economy, a Biden presidency offers an opportunity to rethink trade policy and find a more graceful way to open prosperity’s gate.
Bruce Yandle is a contributor to the Washington Examiner’s Beltway Confidential blog. He is a distinguished adjunct fellow with the Mercatus Center at George Mason University and dean emeritus of the Clemson University College of Business & Behavioral Science. He developed the “Bootleggers and Baptists” political model.