142. Can Biden Make Trade Boring Again?

Episode Summary

Executive Summary: The episode assesses how a Biden administration may reshape U.S. trade policy: calmer and more coherent than Trump’s, but still constrained by political realities, WTO dysfunction, and ongoing disputes with China, the EU, France, and allies. The hosts and guest expect less dramatic action, more interagency coordination, and selective enforcement—especially on labor, forced labor, steel, and existing tariffs—rather than a sweeping liberalizing agenda.

Main Topics: Biden’s trade team and governing style (Priority: 5/5): The discussion centers on who will run trade policy under Biden, with several potential USTR and agency names mentioned. The panel argues the bigger shift may be process-oriented: more coordination across agencies and less erratic unilateralism than under Trump. WTO leadership and institutional reform (Priority: 5/5): A near-term decision is whether the Biden team will back Ngozi Okonjo-Iweala for WTO director general. The broader issue is whether the U.S. will reengage with the WTO, including the stalled appellate body and needed reforms. EU relations, steel tariffs, and transatlantic frictions (Priority: 4/5): The hosts debate how Biden might improve ties with Europe, especially by addressing Section 232 steel tariffs. They also note unresolved disputes like Airbus-Boeing and digital services taxes. China policy and the Phase One deal (Priority: 5/5): The conversation explores whether Biden will continue Trump’s Phase One approach, especially the politically fraught purchase commitments. The hosts suggest Biden may prefer a broader strategic reset and allied coordination rather than focusing on Chinese purchase targets. Enforcement tools: labor, forced labor, and Section 301 (Priority: 4/5): The episode highlights enforcement mechanisms Biden may inherit or expand, including Section 301 cases, Section 232 investigations, labor provisions in USMCA, and bans on goods made with forced labor, particularly linked to Xinjiang. Trade deals and political timing (Priority: 3/5): The hosts assess ongoing talks with the UK and Kenya, arguing a Biden administration is unlikely to rush major deals. Trade promotion authority deadlines and the political sensitivity of agriculture, food rules, and Congress make quick agreements unlikely.

Key Arguments: Biden is likely to create a calmer, more coherent trade policy environment, with more interagency coordination and less presidential freelancing than under Trump. The identity of the USTR matters, but perhaps less than whether the administration uses a functional interagency process to align policy across government. The WTO director general vacancy is an early test of whether Biden wants to signal constructive multilateralism, but Senate and domestic politics could complicate quick support. The WTO appellate body issue will take longer because there is bipartisan U.S. concern over how it operated and because reform is a prerequisite for any reinstatement. Removing or modifying steel tariffs could quickly improve relations with the EU, but Biden is unlikely to embrace more foreign competition in steel given campaign pledges and Buy America priorities. The Trump-imposed steel tariffs created a WTO awkwardness over national security claims; a Biden team would likely want a WTO-consistent resolution to avoid setting a bad precedent. The Phase One China purchase commitments are politically risky for Biden: success could reward Trump, while failure could be blamed on Biden’s enforcement choices. A Biden administration may want to keep trade and broader China tensions somewhat separated, but climate cooperation, security, and human rights could also make trade talks harder. Future trade enforcement may rely more on labor, forced labor, and targeted sanctions than on launching new WTO litigation, especially while the appellate body is disabled. USMCA labor enforcement and Xinjiang forced-labor concerns are likely to become important, visible priorities for a Democratic administration. Major new trade deals with the UK or Kenya are unlikely to be rushed, because the timeline, congressional politics, and unresolved substantive issues make quick passage improbable.

Data Points: November 6, 2020: Indefinite postponement - The WTO meeting to formally choose the next director general was postponed after the Trump administration blocked consensus. January 6, 2021: Tariff suspension deadline - U.S. suspension of retaliation over France’s digital services tax was set to expire on this date. $200 billion: Additional U.S. exports target - The Trump-era Phase One deal set a target for China to buy this much more in U.S. exports by end-2021. July: TPA expiration month - Trade Promotion Authority was described as expiring in July, constraining the timeline for a U.S.-UK deal. April 1: TPA notification deadline - The administration would need to tell Congress it intended to sign a deal by this date to use TPA fast-track procedures. 2 countries: U.S. trade deal negotiations discussed - The episode focuses on ongoing talks with the United Kingdom and Kenya.

Pivotal Quotes: "not Trump's chaotic trade war, erratic tweets and bluster that's only stiffed American workers and consumers, including farmers" — Biden stump speech excerpt: Used at the beginning to frame Biden’s critique of Trump-era trade policy "I do think that they don't want to do a whole lot on trade to begin with" — Doug Palmer: Characterizes the likely scope and ambition of the Biden administration’s trade agenda "I do expect that trade will be will become boring again" — Doug Palmer: Summarizes the expectation that trade policy will be less sensational and less news-driven under Biden

Implications: Listeners should expect a less confrontational, more institutional trade policy under Biden, but not a dramatic retreat from protectionism. Key watchpoints are WTO actions, China enforcement, steel tariffs, and labor/forced-labor cases rather than big new deals.