In 2025, the return of Donald Trump to the White House is anticipated to bring about a notable shift in U.S. economic policy across various sectors. However, the adjustments to U.S. trade and industrial policy might not be as drastic as anticipated. The status quo established during Trump’s initial term continues to influence many trade policies. Despite campaigning against Trump’s imposing tariffs in 2020, President Biden opted to uphold and even expand U.S. trade constraints and economic nationalism.
The driving force behind this consistency seems to have been primarily political in nature. Biden’s advisors, keen on securing "Rust Belt" votes for reelection and combating a prominently protectionist adversary like Trump, saw economic nationalism as the most viable approach. With the luxury of being unencumbered by these political constraints now, and acknowledging the failure of such a strategy, Biden is facing a dwindling timeline to rectify past policy blunders and enhance the economic and geopolitical future of the United States before Trump’s reentry into office.
Several significant measures could be taken by Biden to effectuate positive change in policy. These suggestions, though optimistic, are realistic and potentially impactful. While certain actions, like eliminating most U.S. tariffs, are not feasible due to congressional requirements, there are other steps that Biden could undertake independently.
- Revisiting Tariffs: Biden has the opportunity to reconsider his stance on the detrimental effects of unrestricted U.S. tariffs. A prime move would be to eliminate the "national security" tariffs on global steel and aluminum imports, as well as the "Section 301" tariffs on Chinese imports initiated under Trump. These tariffs, imposed on weak grounds, have inflicted significant harm with minimal benefits. Their unilateral implementation allows Biden to swiftly revoke them at his discretion, ensuring a smoother transition without imminent threats of reinstatement.
- Scrapping Unjust Tariffs: As a follow-up, Biden could dismantle tariffs on consumer goods from China and other unwarranted "national security" tariffs on metals from allied regions. Ridding the U.S. of these economically imprudent measures would not only signify a step towards fair trade but also lessen potential political repercussions associated with inflation and consumer price surges.
- Addressing Solar Panel Safeguards: Biden should also consider ending the global restrictions on imported solar panels, as they are both expensive and unnecessary. By doing so, the U.S. can promote cleaner energy options and support local solar businesses, thus aligning with his climate objectives.
- Restoring Congressional Authority Over Tariffs: Encouraging Congress to reclaim some authority over tariffs, previously delegated to the president, can mitigate risks posed by future arbitrary tariff imposition. Such legislative reforms would establish a more balanced trade policy framework and limit presidential discretion in trade matters.
- Fast-Tracking Foreign Investments: Accelerating the approval process for a Japanese company’s acquisition of U.S. Steel, stalled for political reasons, would not only benefit the American steel industry but also bolster national security and present the U.S. as receptive to strategic foreign investments.
In conclusion, these proposed policy alterations by Biden could mark a significant shift in U.S. economic strategies, albeit under optimistic circumstances. While enacting all these changes may seem ambitious, their implementation would be transformative for U.S. trade relations and economic stability. The fresh approach advocated in these policy recommendations could lead to a more competitive and resilient economic landscape, setting a constructive precedent for future administrations.
