Canadian Manufacturing

Biden treads carefully around Trump’s combative trade policy

Biden administration has yet to move on undoing the aluminum and steel tariffs.

February 9, 2021  by Associated Press

President Joe Biden has wasted no time in dumping a batch of major Trump administration policies. He rejoined the Paris climate agreement. He ended a ban on travellers from mostly Muslim countries. He cancelled the Keystone XL oil pipeline. He reversed a ban on transgender people serving in the military.

Biden and his team are tiptoeing, though, around one of Donald Trump’s signature legacies: His go-it-alone moves to start a trade war with China and bludgeon some of America’s closest allies with tariffs on their steel, aluminum and other goods. The moves upended seven decades of U.S. policy in favour of ever-freer trade but did little to achieve Trump’s goal of narrowing America’s vast trade deficit.

For now, the Biden administration seems intent on approaching trade cautiously. Most striking, perhaps, is what Biden hasn’t done: He hasn’t called off Trump’s trade war with China. He hasn’t promised to scale back or cancel his tariffs on imported steel and aluminum or to end an impasse that’s left the World Trade Organization unable to function as arbiter in global trade disputes.

Instead, the administration’s policymakers are focusing on urgent priorities — distributing COVID-19 vaccines as fast as possible and providing much more aid to a pandemic-pounded economy.

Advertisement

Democrats are still stung by Trump’s surprise victory in 2016. Trump abandoned the modern Republican Party’s support for free trade agreements. Instead, Trump cast himself as a populist defender of manufacturing workers — who would eradicate unfair trade practices and restore factory jobs.

The new president has promised one significant change from Trump’s America-above-all trade stance: Biden wants to patch up relations with key U.S. allies, such as the European Union and Canada, which were bewildered and infuriated by Trump’s mercurial and belligerent policies.

“The mantra has been: No sudden moves” on trade — and focus on instead on fighting the pandemic and delivering economic relief, said William Reinsch, a former U.S. trade official now at the Center for Strategic and International Studies.

Consider Trump’s tariffs on foreign steel and aluminum, imposed in 2018. Reducing or dropping those taxes would seem like an easy way to heal wounds.

America’s allies were especially angered by Trump’s dubious justification for the sanctions: Dusting off a little-used tool — Section 232 of the Trade Expansion Act of 1962 — he declared their aluminum and steel a threat to U.S. national security, a stinging insult to close allies.