Bloomberg Businessweek - USA (2020-11-16)

◼ ECONOMICS Bloomberg Businessweek November 16, 2020

41

ofa badlyneededefforttoreinforceandupdatethe
internationalorderandaddresstherealthreatsto
itslong-termviability,”JakeSullivan,oneofBiden’s
closestpolicyadvisers,wroteina 2018Foreign
Affairsarticletitled“TheWorldAfterTrump.”
Thewords“trade”and“economicorder”don’t
featureonceinaneconomicrecoverypaperposted
bytheBidentransitionteam.Instead,thedocument
echoesTrump’spromisetorestoreU.S.industrial
might.It vowsto“mobilizeAmericanmanufacturing
andinnovationtoensurethatthefutureis madein
America.”It alsostresses“theimportanceofbring-
inghomecriticalsupplychains”andpledgesto
“builda strongindustrialbase.”Thatfitswithwhat
adviserssayis Biden’splantofocusonmakingsure
theU.S.approachesitsrelationshipswitheveryone
fromChinatoalliesinEuropefroma positionof
domesticeconomicstrength.
Ratherthanrelyingonnewdefensivetradebar-
riersasTrumphas,Biden’splanshingeonencour-
aginginvestmentathomeviataxincentivesfor
companiestobuildfactoriesintheU.S.,andgov-
ernmentspendingoninfrastructureandalternative
energytoboostdemand.Theunderlyingideais
thata stronger,moreconfidentU.S.—ratherthana
belligerentone—canturnaroundthenarrativethat
it’sa decliningsuperpower,accordingtomultiple
adviserswhospokeontheconditionofanonymity.
Anyrebuildingoftheglobalorderislikelyto
beginwitha methodicalassessmentofwhere
thingsstand,whichwilltaketimeandrequirea
certainamountofpatiencefromallies.Bidenand
VicePresident-electKamalaHarrishavedescribed
Trump’stradewarsasdisastrous,andyettheyalso
refusedthroughouttheircampaigntopledgeto
removethetariffsonimportsrangingfromChinese
componentstoFrenchwine.AdviserssayBiden
intendstocarefullyreviewthetariffs.Whileheand
histeamareeagertoportraythemselvesasgetting
toworkquickly,theyfacetheploddingrealityof
Americanpoliticaltransitions.
Lighthizer’sreplacementasU.S.tradechiefis
yettobenamed,andBiden’spickwillfacea Senate
confirmationprocessthatcouldtakemonths.
That’slikelytoputonholdanymajortradepolicy
decisionsuntilwellbeyondBiden’sfirst 100 days
inoffice, a periodthatwill beconsumed by
addressing the pandemic and trying to get a new
stimulus package through a Congress that may be
bitterly divided.
Top of the list on trade is what to do with China.
The president-elect is facing decisions on whether
to retain or lift tariffs and national security-driven
bans on companies such as Chinese-owned Huawei
Technologies Co., as well as whether he wants to

build on Trump’s “phase-one” deal with Beijing.

How to deal with China is set to color almost every-

thing—including whether to go down the seem-

ingly unlikely path of rejoining the Trans-Pacific

Partnership, which doesn’t include China. The

TPP has long been seen by strategic thinkers in

Washington as a way to strengthen the U.S. posi-

tion in the Asia-Pacific and to help counter China’s

economic rise. Trump abandoned the pact on his

firstfullworkdayinoffice.ManyAsianallieswould

lovefortheU.S.tocomeback.“Goingforward,

we’regoingtobelookingmoreandmorethrough

thelensofChinaaswepursuetradepolicy,”says

WendyCutler,whowastheTPP’schiefU.S.negoti-

atorandnowleadstheAsiaSocietyPolicyInstitute.

“Whenwechoosenegotiatingpartners,whenwe

chooseissuesthatwewanttofocuson,whenwe

thinkofrestrictions,it is allgoingtobethroughthe

lensofChina.”

ForBiden,anotherinescapableTrumpadmin-

istrationlegacyrelatedtoChinais likelytobethe

scrubbingoftheonce-sacrosanctlinebetweeneco-

nomicandnationalsecurity.Trumphasregularly

invokednationalsecurity,sometimesdubiously,in

histradeandtechnologybattles,includinginhis

assaultsonHuaweiandotherChinesecompanies.

“Theerasureofthelinebetweeneconomicand

nationalsecurity, tome,isheretostay,”says

JenniferHillman,a formerU.S.tradeofficialwho’s

nowattheCouncilonForeignRelationsandwasa

policyadvisertotheBidencampaign.

Theincomingadministrationalsomustaddress

a brewingtradewarwithEuroperelatedtoa

long-standingdisputebetweenAirbusSEand

BoeingCo.overindustrialsubsidies,andplans

byFranceandothercountriesfornewdigital-

service taxes aimed at American tech giants such

as Alphabet Inc.’s Google and Facebook Inc.

The situation won’t be helped by the European

Union’s decision to go ahead with its own tariffs

on imports from the U.S., authorized by the World

Trade Organization. Attention will also turn toward

negotiations with countries such as Kenya and

“The erasure

of the line

between

economic

and national

security,

to me, is here

to stay”

Year-over-yearchangein U.S.annual trade value

DATA: U.S. CENSUS BUREAU

European Union Mexico Canada China

2010-2019 U.S. imports U.S. exports

20%

0

-20