Biden's Trade Policy: Continuity or Change in the Early Days?

Introduction

As President Joe Biden settles into his role as the 46th President of the United States, the global trade community watches with keen interest to see how his administration's trade policies will unfold. One week into his term, we're beginning to see some early indicators of the direction his trade policy might take. In this article, we'll explore the initial signs, focusing on three key areas: appointments, inherited policies, and new initiatives.

Key facts from recent developments:

• Several key trade-related cabinet positions have been filled or nominated
• Many Trump-era trade policies remain in place pending review
• "Buy America" plan announced, emphasizing domestic procurement
• Keystone XL pipeline project canceled, impacting US-Canada trade relations

Key Appointments Shaping Trade Policy

President Biden has moved swiftly to nominate and confirm key cabinet members who will play crucial roles in shaping US trade policy. As of now, several important positions have been filled:

• Secretary of State: Tony Blinken (confirmed)
• Secretary of the Treasury: Janet Yellen (confirmed)
• National Security Adviser: Jake Sullivan (position doesn't require Senate confirmation)

Additionally, nominations are pending for other critical roles:

• US Trade Representative (USTR): Katherine Tai
• Secretary of Commerce: Gina Raimondo
• Secretary of Agriculture: Tom Vilsack

Most of these appointees have previous experience in high federal office and are generally well-respected. Notably, none of them have a history of being harsh trade critics, unlike some key figures in the previous administration such as former USTR Robert Lighthizer or Peter Navarro.

While it's still too early to predict exactly how this team will formulate trade policy, their backgrounds suggest a potential shift towards a more moderate approach. However, the exact dynamics of policy formulation remain to be seen. Will there be a single driving force behind trade decisions, as was often the case in the Trump administration, or will we see a return to a more collaborative, interagency approach?

Inherited Policies: A Cautious Approach

President Biden has inherited a complex web of ongoing trade disputes and policies from the previous administration. His team's initial approach to these inherited issues has been one of caution and review:

China Tariffs

The Biden administration has chosen to leave in place the tariffs on imports from China (imposed under Section 301) pending a comprehensive review. This decision, coupled with broad support for a hardline stance against China expressed during confirmation hearings, suggests a degree of continuity with the previous administration's approach to China.

Steel and Aluminum Tariffs

Similarly, the Section 232 national security tariffs on steel and aluminum remain in place, also subject to review. This wait-and-see approach might be surprising given Biden's campaign criticism of Trump's tariffs, but it could be a strategic move to minimize controversy during key confirmation hearings.

World Trade Organization (WTO) Issues

In a somewhat unexpected move, the US representative at a recent WTO meeting in Geneva declined to change the controversial stance blocking appointments to a key dispute body. This decision seems at odds with Biden's expressed desire for greater cooperation with allies.

US-UK Free Trade Agreement

Following a call between President Biden and Prime Minister Johnson, the Biden administration appeared less enthusiastic about a US-UK free trade agreement than their British counterparts, suggesting a potential de facto deferral of this issue.

These initial responses to inherited policies indicate a cautious approach, with the administration taking time to review and assess before making significant changes. This strategy allows for a thorough evaluation of each policy's impact and effectiveness before deciding on a course of action.

New Initiatives: Early Signs of Biden's Trade Agenda

While much of the early focus has been on reviewing inherited policies, the Biden administration has also launched some new initiatives that provide insights into their trade agenda:

"Buy America" Plan

The major new initiative of Biden's first week was the announcement of his "Buy America" plan. This plan aligns closely with his campaign promises and emphasizes strengthening domestic procurement. While similar in spirit to some Trump administration policies, Biden argues that his approach is more stringent. This initiative signals a continued focus on boosting domestic manufacturing and job creation.

Keystone XL Pipeline Cancellation

President Biden canceled the Keystone XL pipeline project, presenting it primarily as an environmental measure. However, this decision has significant trade implications, particularly for US-Canada relations. The move has led to calls from some Canadian officials, such as Alberta Premier Jason Kenney, for trade sanctions against the United States in retaliation.

These early initiatives suggest that the Biden administration is willing to take decisive action on issues that align with its broader policy goals, even if they may create some friction with trading partners.

Looking Ahead: Challenges and Opportunities

As the Biden administration settles in, several important trade issues are looming on the horizon:

• Trade conflicts with Europe
• Pressures to pursue complaints against Mexico under USMCA
• Decision on whether to renew Trade Promotion Authority, which expires in early July

How the administration responds to these challenges will provide further clarity on its trade policy direction. While many of Biden's key moves so far have been deferrals rather than decisions, the early picture appears to be of a trade-skeptical administration, staffed by an experienced group of moderates.

For businesses engaged in international trade, this period of policy review and potential change creates both challenges and opportunities. It's crucial to stay informed about policy developments and be prepared to adapt to potential shifts in the trade landscape.

How FreightAmigo Can Help Navigate Trade Policy Changes

As the global trade environment continues to evolve under the new US administration, businesses need reliable partners to help them navigate these changes efficiently. FreightAmigo, as a full-service Digital Logistics Platform, is well-positioned to support organizations in adapting to potential policy shifts:

• Real-time Information: Our Digital Platform provides up-to-date information on shipping routes, costs, and regulations, helping businesses stay informed about any changes resulting from new trade policies.
• Flexible Shipping Options: With our comprehensive network of carriers and shipping options, we can help businesses quickly adapt their logistics strategies in response to policy changes, ensuring minimal disruption to their supply chains.
• Customs Clearance Assistance: Our Digital Logistics Solution includes support for customs clearance, which can be particularly valuable if there are changes to tariffs or trade agreements.
• Risk Management: Through our integrated cargo insurance options, we help businesses mitigate risks associated with potential trade policy uncertainties.
• Cost Optimization: Our Digital Platform allows businesses to compare quotes from multiple carriers, helping them optimize costs in the face of changing trade dynamics.
• Expert Support: Our 24/7 logistics expert support can provide guidance on navigating complex trade policy changes and their impact on shipping operations.

By leveraging FreightAmigo's Digital Logistics Platform, businesses can stay agile and responsive to the evolving trade policy landscape under the Biden administration. Our comprehensive Digital Logistics Solution is designed to provide the flexibility and support needed to thrive in an ever-changing global trade environment.

Conclusion

The early days of the Biden administration have provided some initial clues about the direction of US trade policy, but many questions remain. While there are elements of continuity with the previous administration, particularly in the approach to China and certain tariffs, there are also signs of potential shifts in priorities and strategies.

As the situation continues to evolve, businesses involved in international trade must stay informed and be prepared to adapt. FreightAmigo's Digital Logistics Platform stands ready to support organizations in navigating these changes, offering flexible solutions, real-time information, and expert guidance.

We encourage readers to stay tuned for further developments in US trade policy and to consider how Digital Logistics Solutions can help their businesses remain agile in this dynamic environment. For more information on how FreightAmigo can support your logistics needs in these changing times, please don't hesitate to reach out to our team of experts.