In a less than a fortnight the polling sites will close and the US presidential race will draw to an end, with voters either having given Donald Trump another four-year crack at the whip, or opted for change in the shape of Democrat nominee and former vice-president Joe Biden.

Americans have had a chance to review Trump’s approach to trade over the course of his first term, but where Biden stands on issues such as handling China, onshoring supply chains, applying tariffs, and participating in the World Trade Organization (WTO) is perhaps less clear.

With insight from counsel Dana Watts and senior international trade advisor Welles Orr, both at law firm Miller & Chevalier, GTR assesses and contrasts the two candidates’ stances on various key aspects of US trade policy.


On China

Having promised to get tough on China during his 2016 election campaign, Trump has been more than willing to resort to section tariffs throughout his first term in office in a bid to try and reduce the trade deficit with Beijing.

After Trump kicked off the trade war with a first bout of levies on Chinese goods in July 2018, the two sides exchanged tit-for-tat tariffs over the course of the next 18 months until formally signing a phase one trade agreement in January this year.

The US agreed to reduce tariffs on certain Chinese goods as part of that deal, which Trump claimed to be “very large and comprehensive”.

In return, China promised to expand purchases of certain US goods and services by a combined US$200bn over 2020 and 2021 from 2017 levels, while also pledging to address some of the Trump administration’s concerns about intellectual property practices.

Should Trump win the election next month, Miller & Chevalier’s Orr says the president will likely push to move quickly into the next phase of the trade deal.

“Trump will continue – if re-elected – to jump into showcasing how the so-called phase one deal with China has worked and what it’s yielded, and then get right into phase two. But I think there’s a lot of scepticism about what phase two really would entail,” he says.

According to Watts, a number of experts believe that China has yet to meet its commitments under phase one. The Peterson Institute for International Economics’ (PIIE’s) trade deal tracker finds that China has imported less than half of the products it had pledged to bring in from the US by this point; China’s year-to-date total imports of covered products from the US were US$56.1bn through August, compared with a prorated target of US$115.1bn.

The Trump administration remains outwardly upbeat about the deal’s progress, however, with the US Trade Representative (USTR) publishing a statement in August referencing the “progress” being made between the two sides on various issues.

These included intellectual property rights, as well as the removal of impediments to American companies in the areas of financial services and agriculture.

The USTR statement added: “The parties also discussed the significant increases in purchases of US products by China as well as future actions needed to implement the agreement.”

Welles says Biden is unlikely to move speedily to roll back tariffs on China, or attempt to quickly change Trump’s overall China policy.

“I think Biden would take a ‘go slow’ approach on the China tariffs; I don’t think he’ll take the band aid off the wound of the relationship, nor will there be a wholesale refacing of the relationship. That will take time.”

He adds: “Based on my conversations with Tony Blinken [a top trade advisor to Joe Biden], they want to take a different approach to China that would involve more allies, rather than a strictly ‘US go it alone’ approach to getting China to go along with the US’ wishes. But I don’t think they’re going to do anything straight away.”

Watts agrees that Biden won’t make any “heavy moves” in the short-term, but says a Biden presidency may ultimately look at alternative options to the section 301 tariffs used “extensively” under Trump.

She adds: “There’s a lot of different tools that the US has, in addition to tariffs. There are also countervailing duties and anti-dumping, as well as measures against currency manipulation.”

Should Biden win, the former vice-president would also be forced to take a decision on the use of sanctions, which Trump has used to limit the influence of Chinese firm Huawei in the 5G sector in particular.

Earlier this year, Trump effectively banned chip manufacturers in any country around the world from selling semiconductors to Huawei if US technology was involved in any part of the production process.

But Watts says that there are no specific details in Biden’s plan about how he would deal with the 5G sector or Huawei, adding: “Biden’s plan is, to be honest, a little light on specifics when it comes to international trade.”


Protectionist policies to the fore?

Trump’s so-called “America first” approach to trade has seen the US also slap tariffs on various other major trading partners. It’s not yet clear whether Biden would reverse these hurdles to free trade, however, given the pressure from domestic manufacturers.

Since coming to office in 2017, Trump has been particularly active in using section 232 tariffs – which lean on national security justifications –  in the steel and aluminium sectors, imposing levies on trading partners including the EU, Canada, Mexico, Turkey, Japan and India.

To date, most countries are still subject to tariffs of 25% on steel and 10% on aluminium.

Only Australia and South Korea have negotiated exemptions, while the US lifted tariffs for Mexico and Canada as part of the signing of the United States-Mexico-Canada Agreement (USMCA) – which came into force in July. 

According to Orr, Biden is campaigning on a broadly similar message, promising to bring manufacturing back to the US, with his campaign promoting slogans of “buy American” and “by American”.

In one main proposal, the former VP is bidding to create a US$400bn federal procurement fund for products made in the US, which his campaign says would create at least 5 million new jobs in manufacturing and innovation.

Watts says that campaign is relatively non-committal when it comes to the issue of reshoring production, although notes that Biden does want to move some supply chains, especially for critical goods, back to the US.

Meanwhile, on the tariff front, Biden will have to make a decision about rescinding tariffs on key allies such as the EU.

But Watts says he has yet to go on the record about the issue, and some advisors say that, at least in the short term, he probably won’t lift tariffs.

Watts adds: “He’s going to be under pressure from European Union steel manufacturers to do so. But he’s also supported by labour groups, such as US Steel Workers, that want the tariffs to be kept in place.”


Closer co-operation with allies and WTO reform?

Generally, both Orr and Watts expect Biden to work far more closely with allies like the EU.

Relations with the EU have been strained during Trump’s first term, with the president blasting the European bloc as a “foe” in trade, while also lamenting that European counterparts don’t contribute enough to the military alliance Nato.

In one major flashpoint last year, Washington also hit the EU with tariffs on US$7.5bn-worth of goods over a longstanding dispute over state-aid provided to aircraft manufacturer Airbus. The EU now looks set to retaliate, after the WTO said last week it had the right to impose levies over US subsidies to Boeing.

“I think the major difference could be more co-operation with allies. Trump has notoriously taken a zero sum and ‘go it alone’ approach to trade, which has had an impact on a lot of longstanding, multinational organisations,” Watts says.

She adds: “I think a Biden administration would definitely seek to co-ordinate with allies before approaching major trading issues like how to approach China.”

Meanwhile, Watts says she expects Biden would want to begin renegotiating the Trans-Pacific Partnership (TPP), or joining the existing Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The TPP was sprung as an idea under the Obama presidency, but was swiftly killed off by Trump, who withdrew from it within days of coming into office.

Biden would also prioritise working with allies to reform the WTO, Orr says.

Trump has been roundly critical of the WTO, with his administration blocking the appointment of new nominees and so stopping its appellate body from having the quorum necessary for hearing appeals.


Greener manufacturing?

The election promises to shake up US energy policy over the next few years, with the two candidates’ views on fossil fuel regulation and support for clean energy manufacturing standing in stark contrast.

While Trump has made no mention in his 2020 election campaign manifesto of a programme for tackling climate change – which he’s questioned the science behind – Biden has pledged to roll out a US$2tn clean energy investment plan.

Biden says this would bolster support for US manufacturers in the clean energy sector, offering incentives for US firms that “supply low-carbon solutions to the international market in order to spur US industry, jobs, and competitiveness, and make America the world leader in clean energy technologies”.

As part of his broader green energy plan, Biden’s campaign notes that he would work to reduce US fossil fuel exports and overseas investments as well.

His site reads: “Biden will ensure the Overseas Private Investment Corporation (OPIC), the Export-Import Bank (US Exim), and the new US International Development Finance Corporation significantly reduce the carbon footprints of their portfolios.”

“For example, these agencies will be prohibited from any financing for coal-fired power plants so that US finance is no longer a dirtier alternative to the World Bank,” the site states.

A Biden win would likely mean tighter regulations for fossil fuel producers at home too.

During his first term, Trump has moved to roll back various regulations imposed during the Obama era, which brought in methane limits for new oil and gas drilling operations, offshore drilling safety measures, as well as a ban on oil and gas drilling in large swathes of the Arctic and Atlantic oceans.

Should Trump win this year, he’s said he would look to expand drilling for oil and gas projects on federal lands and offshore, including in the Alaska National Wildlife Refuge.

Justin Rostant, a principal analyst at Wood Mackenzie, notes in a blog post that a Biden presidency would be far more restrictive.

“The most eye-catching of Biden’s proposals for the offshore industry is a promise to ban ‘new oil and gas permitting on public lands and waters,’” he says.

He also points to the Democrat candidate’s plans to impose protections for the Arctic National Wildlife Refuge and other areas President Trump has sought to open up for oil and gas development, including the eastern Gulf of Mexico.

Speaking about the overall impact on the oil and gas industry, Rostant adds: “Biden’s plans lack clarity… But by any definition, the impact on investment, production and tax revenues would be substantial.”