Biden's Protectionism: Trumpism with a Human Face: The president's "worker-centric" trade policy amounts to special-interest favoritism.

• Author: Lemieux, Pierre

As Joe Biden was beginning his presidency, I wrote in these pages that his economic policies would likely follow, rather than depart from, those of his predecessor, Donald Trump. (See "Joe Biden's Economic Agenda: An Early Appraisal," Spring 2021). Concerning international trade specifically, I wrote that Biden was "likely to continue Trump's policies" How do these predictions stand 18 months later?

In some cases, there have been positive developments. The Biden administration has stopped openly targeting market economies and friendly countries with trade-war measures. It settled a 17-year dispute with the European Union over subsidizing the manufacture of large aircraft. There have been some other encouraging bits and pieces. Still, Biden has kept many of Trump's protectionist measures and has even added to them.

THE CASE OF CHINA

Under Trump, the average U.S. tariff on Chinese imports increased from about 3% to nearly 20%. A tariff is a tax that typically falls on the consumers of the importing country, Americans in this case. The Biden administration has not expressed any clear intention of eliminating the China tariffs. They violate the rules of the World Trade Organization (WTO), of which the U.S. government had been the main supporter for six decades. One rumor is that if the administration did abolish or reduce some visible tariffs on consumer goods (shoes, for example), it would increase less visible tariffs on industrial goods.

According to some observers, the Biden administration is debating the launch of a formal (Section 301) investigation into subsidies China provides state companies under its state capitalism regime. Paradoxically, the more the U.S. government bosses around American importers and investors, the more it resembles the economically authoritarian Chinese regime. According to The Economist, "the Biden approach looks less like a retreat from Mr Trump's brawl with China and more like a professionalisation of it."

POLITE TRUMPISM

One difference between the two presidents is that Biden practices what former WTO Appellate Body judge James Bacchus calls "polite protectionism." There are no longer any angry tweets or absurd claims, but Trump's "national security" tariffs on aluminum and steel from friendly countries, or the "voluntary restraints" later "negotiated" with them, generally remain in force. It should be noted the new tariffs on aluminum and steel were not really targeting China since there was already little of these products imported from that country because of previous protectionist barriers.

In general, the Biden administration's interest in trade appears motivated by the environmental, labor, and other restraints it can impose on trade agreements. There is no real effort to liberalize trade. For example, recent trade discussions with the United Kingdom produced pious generalities about the importance of "worker-centric trade" and "workjing] to develop more durable and inclusive trade policies that demonstrate that trade can be a force for good and create more opportunities for people and gender equity" (to quote from the joint statement issued after the meeting), but nothing about abolishing government-created obstacles to trade. Likewise, the new Indo-Pacific Economic Framework offers a palaver of pieties about things like "supply chains" instead of pursuing the benefits of trade. (See "Dispelling Supply Chain Myths," Summer 2022.)

Very early in his presidency, Biden issued three executive orders expanding the domestic content requirements in government procurement. "Biden Out-Trumps Trump," affirmed a Wall Street Journal editorial.

The $280 billion CHIPS and Science Act that Biden recently signed into law subsidizes domestic producers of microprocessors and generously distributes political pork and corporate welfare, all in the name of national security. The legislation also heavily subsidizes scientific research and provides additional funding to related federal agencies, continuing the unproductive stop-and-go, haphazard money-throwing that has characterized federal intervention in this field. (See "Much to Criticize, Much Left...