When the presidential candidate Joe Biden was asked in 2020 what he intends to do with the punitive tariffs that Prime Minister Donald Trump had imposed on imports from China in the event of his election, his answer left nothing to be desired in terms of clarity: the tariffs, according to Biden, were essentially Complete botch, because in truth they burdened the buyers of the goods in the USA more than the manufacturers in China. They should therefore be abolished.
That analysis was correct then, and it is a year after Biden took office – which begs the question of why the tariffs are still in force then. The answer is sobering: Because Biden has made a truly breathtaking turnaround. It is true that he is cosmopolitan and less clumsy than Trump. In the matter, however, he has adopted his political approach, according to which punitive tariffs are an effective means of exerting pressure on economic policy. Biden’s trade policy, a US political scientist recently wrote, is a kind of “Trumpism with a human face”.
Now, of course, it is not wrong with China, after all, the commercial communists in Beijing also whistle about any trade rules that stand in the way of their economic expansion efforts. In addition, Biden has just lifted the tariffs on steel and aluminum deliveries from the EU that Trump had imposed. Doesn’t that show that his approach is much more nuanced?
Yes and no. The incumbent US president is undoubtedly three classes smarter than his predecessor, who thought it was an ingenious strategy to take on the whole world at the same time. And yet the treaty with the EU does not contradict the thesis that Biden is copying Trump’s trade policy, it even proves it: because the tariffs are suspended in order to lower the costs for US importers. But this only applies as long as European steel companies do not deliver more to the USA than the politicians in Washington state.
Free trade has lifted hundreds of millions of people out of poverty
It has little to do with the free trade idea that Europe and the United States have tried for decades to establish as the preferred model of collective management in the world. Instead, it is replaced by a system that the Americans call “managed trade” – an order in which supply and demand, not prices and long-term business relationships, decide what is shipped where, but bureaucrats, quotas and Excel- Tables.
In order not to be misunderstood: free trade and division of labor are not ends in themselves. They have to serve the people and need clear guard rails. They must stand behind fighting climate change, child labor and exploitation, and they must not result in a country missing penny items like face masks and surgical gowns during a pandemic.
But Biden is only marginally interested in all of this. Instead of making his own population fit for the jobs of the future with the help of courageous school and training reforms, he uses Trumpian extortion methods to protect the domestic economy from annoying competition from abroad. It is not only harming US consumers by reducing supply and driving up prices. Rather, it is also employing a strategy that has repeatedly proven useless over the past few decades. This applies to the attempt to protect the domestic cotton industry from foreign competition with tariffs as well as to the helpless efforts to keep Japanese cars out of the US market.
Free trade has its pitfalls, it can threaten jobs and promote exploitation. But at the same time he is that Global economic principle that has freed hundreds of millions of people in Latin America and Asia from hunger and poverty over the decades. It is true that the work on stable guard rails and on ever better social, labor and environmental standards will never end. But it can only succeed if the EU, and above all the USA, take the lead in the movement instead of sneaking around Trump’s poison cabinet.