The Further Bungling of US Trade
After campaigning as a consummate internationalist who would reverse Donald Trump’s myopic nationalist policy agenda, Joe Biden has maintained his predecessor’s protectionist trade policies. In fact, the overly complex, distortive trade-rate-quota regime negotiated with the European Union represents a new low.
WASHINGTON, DC – Among former US President Donald Trump’s many policy mistakes, some of the worst were in the area of trade. His administration’s sweeping tariffs on imported steel and aluminum were neither sensible nor even effective in achieving their stated objectives. The “trade war” with China was a spectacular failure: America’s trade deficit continued to grow, and no new agreements on intellectual property, e-commerce, or other crucial issues were ever reached. Under the much-touted “Phase One” agreement, signed in January 2020, China was forced to intensify its managed trade, rather than adopting a more market-oriented approach.
Accompanying these mistakes was the Trump administration’s failure to pursue America’s interests through multilateral channels such as the World Trade Organization. Leveraging the weight of US trading partners within the WTO would have been a far more effective way to deal with China. The WTO is the appropriate venue for pursuing the liberalization of trade in services and agriculture, and its dispute-settlement mechanism is where formal complaints against other countries ought to be raised and adjudicated. Unfortunately, the DSM has remained inquorate because the US has refused to allow any new judges to be appointed to it.
Prior to his election in November 2020, President Joe Biden was widely believed to be an internationalist who would reverse most of Trump’s blunders. But since taking office, Biden appears to have kept the Trumpian playbook on trade. The US has not sought to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (the successor to the Trans-Pacific Partnership, which Trump abandoned), nor has it ended the trade war with China or reaffirmed America’s support for the WTO.