Sweeping New Biden Regulations; U.S.-Canada Trade Friction
Author: Greg Valliere
July 9, 2021
THE REGULATORY HAMMER: Unable to get regulatory reform past a Senate filibuster, the Biden Administration will propose sweeping changes via an executive order that will be introduced today. This will begin a fierce conflict between Washington and Big Business.
THE TARGET IS CONCENTRATION in key industries that progressive regulators say are keeping prices high and stifling innovation. Fearful of lengthy litigation, the White House will introduce “suggestions” to the regulatory agencies — many of which are, theoretically, independent.
AN ASPIRATIONAL WISH LIST: According to this morning’s Politico, the new proposals will urge the FCC to implement net neutrality rules, along with urging the SEC to force the financial services industry to share data.
MANY OF THE GOALS seem like government over-reach: punishing airlines for poor wi-fi service and baggage handling, for example. And employee non-compete clauses in many U.S. industries would be banned (a complete list of potential changes is in this morning’s Politico).
THE FOCUS ON REGULATIONS will be combined with more aggressive antitrust policies, with mergers coming under greater scrutiny. A potential target is ocean shipping and railroads; concentration in those industries has led to higher prices, the regulators argue. A major target could be the Canadian Pacific proposal to take over Kansas City Southern.
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THE U.S. AND CANADA HAVE TRADE ISSUES: The tone is good — Justin Trudeau and Joe Biden have a solid relationship — but several disputes were on the table this week as Canada’s trade chief, Mary Ng, met with U.S. counterparts in Washington.
THERE WAS RELIEF IN OTTAWA when Donald Trump lost his re-election bid; he had blasted Trudeau as “very dishonest and weak.” But within days of Joe Biden’s inauguration, he abruptly canceled the Keystone pipeline, and now there are other issues between the two countries.
AT THE TOP OF THE LIST is a general concern that Biden’s “Buy America” mandate will shut out Canadian exports. More specifically, the two countries have differences on Canadian solar products and softwood lumber, while the U.S. opposes Canadian quotas on American dairy products.
CANADIAN OFFICIALS HAVE emphasized cooperation on issues like climate change, but in fact the impasse over the 18% U.S. tariff on solar panel cells is so contentious that Canada has called for a dispute settlement panel under terms of the U.S.-Mexico-Canada trade agreement.
THESE ISSUES COULD PUT TRUDEAU in an awkward spot. He’s reportedly considering a snap election this fall, and he wants to avoid a perception of friction with the U.S on issues like pipelines, lumber, and dairy products — which could hurt Trudeau in Western Canada, where his support is shaky to begin with.
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