USMCA makes working class Americans integral to future US trade policy
Biden will be focused on ensuring domestic investments, procurement efforts and tax policy generate benefits for those left behind by the global economy
WASHINGTON, DC — One of the lasting legacies of Donald Trump’s tumultuous presidency will be to give working-class Americans more of a say in U.S. trade policy, experts say — and that could pose a challenge for Canada in the years ahead.
Joe Biden, who successfully flipped blue-collar Wisconsin, Michigan and Pennsylvania in last week’s presidential election, has already promised to prioritize US firms and workers as the country works to recover from its pandemic-induced economic crisis.
Future administrations, be they Democrat or Republican, are unlikely to forget the lessons of 2016 any time soon, a panel of trade experts agreed Nov. 12.
“The president-elect has been quite clear that trade policy begins at home,” said Robert Holleyman, a trade lawyer and former deputy US trade representative in the final years of the Obama administration.
Biden will be focused on ensuring domestic investments, procurement efforts and tax policy are focused on generating benefits for those in the US who have felt left behind by the global economy, Holleyman said.
“We cannot simply look at trade in a vacuum; it has to be part of this domestic discussion — it needs at the end of the day to return the right results for American taxpayers and citizens.”
Biden has promised stiff new tax penalties on companies that manufacture US-bound products outside the country, incentives to keep jobs on US soil and penalties for companies that “offshore” jobs and facilities to lower their tax bills.
He also plans to more strictly enforce, expand and tighten Buy American provisions, make US products more competitive, lengthen the list of “critical materials” that must be American-made and establish a “Made in America” office in the White House.
Canada fully hopes to negotiate waivers to those rules, much as they did in 2010 when Biden, as vice-president, oversaw the implementation of President Barack Obama’s Recovery Act, which included stringent new Buy American restrictions.
The Canadian Embassy has been watching both the presidential and down-ballot House and Senate campaigns closely in order to assess the potential implications, said Kirsten Hillman, Canada’s envoy to Washington.
“We’re fully engaged, and we’ve been providing our analysis,” Hillman said in an interview this week. “That will continue to evolve as president-elect Biden continues to talk more about what their plans are as an administration. But this is an ongoing project.”
Expect a more multilateral approach than Trump, said Brian Pomper, an international trade consultant who spent four years advising former Montana senator Max Baucus during his tenure as Democratic chairman of the Senate Finance Committee.
“I think that the trade initiatives he has to undertake and he has to face he will think about through the prism of foreign policy,” Pomper said.
“The Biden administration’s instincts are going to be multilateral, to be working more with our allies where we can.”
That doesn’t necessarily mean everything the president-elect does on international trade will be diametrically opposed to his predecessor, he added: reversing course “is not as easy as snapping your fingers.”
It won’t be easy to align trade policy with foreign policy, said Stephen Vaughn, who spent two years as general counsel to Trump’s US trade representative.
If the Trump era has proven anything, he said, it’s that it’s critically important to take care of domestic political priorities before worrying about which of your trading partners might be left at a disadvantage.
“We have a lot of workers who are very, very concerned about whether or not their kids are going to be able to live as well as they did, and that has to be a part of the challenge as well,” Vaughn said.
“If the US economy goes down the drain, or the US political system is sort of swallowed up by worker rage, we’re not going to be much of an ally to anybody.”