Published: 2/10/2023 2:22:39 PM
Modified: 2/10/2023 2:22:00 PM
Many Dems have more than a little anxiety about Joe Biden running again. I certainly do given his age, stumbles and classified documents baggage. But if he runs again, he will have international trade as an unexpected winning issue in the fight to lure back blue-collar workers to the Democratic Party.
In running for president in 2015, Donald Trump made clear his view that imports and offshoring of production were decimating communities across America and causing millions of job losses. He argued that the trading system was rigged against us and that we were big losers in the international trade arena.
Trump’s trade views resonated with many blue-collar and non-college-educated voters, and, helped him narrowly defeat Hillary Clinton in 2016 by capturing a whopping 66% of white working class voters.
As Ppresident, Trump pursued an “American First,” unilateral, and protectionist trade policy. He started a trade war with China, used a national security provision in a bogus manner to raise tariffs on steel and aluminum imports from allies in Asia and Europe, withdrew the United States from a wide-ranging trade agreement with Asian-Pacific countries, and weakened U.S. participation in the World Trade Organization.
Having spent over three decades working on trade issues at the Congressional Research Service, I was sure that Biden would end Trump’s “American First” trade policy when he took over the presidency in 2021. After all, Biden had disparaged Trump’s trade policy during the campaign and was a staunch internationalist who had voted for major trade agreements in the past.
Much to my surprise, entering his third year as president, Biden has not reversed Trump’s key trade actions. Despite evidence that Trump’s trade war with China is hurting the U.S. economy more than China’s, the Biden administration has not rolled back Trump’s tariffs. Tariffs on imports of steel and aluminum from our allies have been softened, but not removed.
The Biden trade team has made it clear that entering into new free trade negotiations to knock down trade barriers and encourage countries to treat each other’s products more equally are not on the agenda. And the administration has done little to strengthen the World Trade Organization.
Remarkably, Biden has embraced a range of muscular industrial policies that will encourage investment and production to take place in the United States in ways that our Asian and European allies claim are protectionist. These policies are contained most prominently in two bills Biden signed in 2002 — the $52. 7 billion Chips Act and the Inflation Reduction Act.
While these spending bills have non-trade objectives — bolstering the country’s semiconductor production capacity and fighting global climate change — they also contain provisions that will have trade impacts. To the degree these provisions encourage investment and production to occur in the United States in a manner that discriminates against our trade partners and violates our international obligations, it is fair to say that Biden’s trade policy is now more “American First” than Trump’s in terms of impact.
The $52.7 billion Chips Act provides tax credits for production of semiconductors and chip manufacturing equipment, but only for production in the United States. And while the Inflation Reduction Act sets ambitious environmental targets, it also contains $7,500 in tax credits for U.S. consumers to buy new electric vehicles produced in the United Sates, Canada or Mexico. This means Asian and European car companies are out of luck, and they are not happy campers.
The concerns of our allies that Biden’s approach to trade and investment is protectionist and a threat to the rules-based global economy are featured in the Jan. 12 edition of The Economist. Biden no doubt will have to work to moderate the discriminatory impacts of these policies as they are implemented in order to keep the alliance together.
At the same time, Biden will be showing up across the country, particularly in the Midwest, on a regular basis cutting ribbons at construction sites and new plant openings. These events will provide the president with the opportunity to emphasize how his policies and massive infrastructure spending bill are creating well-paying jobs for hard-working Americans who did not graduate from college and who do not live on the coasts.
Trump’s 2016 razor-slim margin of victory in Michigan and Wisconsin is a stark reminder of how critical winning back even a small chunk of working-class voters is for keeping a Democrat in the White House in 2024.
Ray Ahearn lives in Holyoke.