Biden and Trump Have Similarities on Trade Policy
Author: Greg Valliere
August 28, 2023
AMONG THE IDEAS THEY DEBATED was Trump’s plan to enact a “universal baseline tariff” on virtually all imports to the United States. This idea, which Trump describes as the creation of a “ring around the U.S. economy,” could escalate global economic friction, surpassing the international trade discord that marked much of his first administration, according to critics.
AT THE BEDMINSTER MEETING, the former president called for setting a tariff at 10 percent “automatically” for all countries, a move that experts warn could lead to higher prices for consumers throughout the economy. This has enraged globalists, who contend a tariff would lead to a trade war. Trump has said revenue raised by the tariff would be used to reduce taxes on domestic companies, although it would effectively be a tax on American consumers that would raise their costs.
BIDEN ALSO IS TAKING A HARD LINE ON TRADE with countries such as China, as he rejects trade policy that prevailed in the past few decades. In a front-page Washington Post article this weekend, it appeared clear that the U.S. is willing to embrace a tough stance on trade.
BIDEN HAS MAINTAINED much of Trump’s hardline policies toward Beijing; the Trump tariffs have remained in place. Restrictions on Chinese technology companies have expanded, including a U.S. ban on sales of advanced semiconductors and chip-making equipment to China. The Biden focus is on U.S. workers and manufacturing in the U.S., not abroad.
AS RELATIONS SOURED WITH BEIJING THIS YEAR, Biden prohibited the sale to China of the most advanced U.S. computer chips and last month added a partial ban on American investment in some Chinese technology start-ups.
LEFT OUT OF THE PRESIDENT’S STRATEGY, to the irritation of many business groups, have been traditional trade deals, which have given American companies greater access to foreign markets in return for allowing producers in those countries to sell more goods in the United States. The White House says the old approach has cost many American factory workers their jobs, according to the Washington Post article.
BIG TRADE DEADLINES LOOM: They include an effort with Europe to remake the global steel market; negotiations toward an Indo-Pacific Economic Framework (IPEF); and deciding what to do about tariffs on U.S. imports from China. (Commerce Secretary Gina Raimondo is in Beijing now for talks with Chinese officials.)
BIDEN, MEANWHILE, IS SPENDING enormous amounts that he won in legislative victories in 2021-22 he’s spending aggressively on subsidies for domestic semiconductor manufacturing, clean energy programs and public infrastructure. Neither he nor Trump seem to favor sweeping trade deals, and they both are willing to use the tariff weapon as the U.S. seemingly has embraced a tougher trade stance ahead of the 2024 election.
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