The abandonment of multilateralism and international institutions by the United States since 2016 has been condemned. Joe Biden will reincorporate the United States into the Paris Agreement to combat climate change and the World Health Organization. He is considering restoring the agreement that six powers signed with Iran in 2015 to curb its nuclear program. The president-elect will not impose more tariffs on Chinese exports, but will not repeal existing ones. The US has suspended tariffs of 25% on 1.3 billion dollars of French exports that it planned to apply after the French government has collected the digital rate again. Unlike Trump, Biden prioritizes deepening the relationship with the EU to signing the bilateral free trade agreement with the United Kingdom that Boris Johnson longs for
The objectives of its Green New Deal are practically identical to those of the EU. Five days after Biden’s triumph, the Vice President of the European Commission, Valdis Dombrovskis, announced the application of tariffs on 4,000 million US exports of aircraft, aviation parts and agricultural products. The EU has signed an investment agreement with China without waiting for Biden to take office. To believe that the status quo of the Obama years will be returned is a profound mistake. The president-elect will not ignore China’s campaign of infiltration of US institutions or the 2,000 active FBI investigations into Beijing’s technology spying. China’s trade surplus with the United States reached a record high of 418 billion in 2018, an imbalance that has increased fivefold since China’s entry into the WTO in 2001.
Biden will not be able to run for re-election in 2024 because he will be 82 years old. You will need to manage your political capital with great caution. The reactivation of the economy and the containment of Covid-19 with vaccines that are being administered more slowly than expected will absorb the attention of his Cabinet. The left wing of the Democratic Party will continue to demand that economic, labor and environmental policies be formulated in the key of fighting racism and increasing inclusion. The supporters of the still president rage against the Republican legislators who did not oppose the certification of Biden’s victory. Caught between the anger of Trump’s rank and file and Democratic attacks, Republican lawmakers likely will not endorse another stimulus package and will not join the new administration’s more ambitious legislative initiatives. The 51 Democratic votes in the Senate are insufficient to pass substantial spending increases or an infrastructure renovation plan.
Biden intends to couple his internal measures to the national security of the United States, especially in relation to Covid-19, climate change, migration and China. He argues that the United States should formulate its foreign policy based on the impact of these aspects on American families. He warns that the policy towards China will be tougher than in previous Democratic governments. In 2015, the Chinese Communist Party approved the Made in China 2025 strategy to achieve world economic supremacy. It sets content targets for Chinese parts (70% by 2025) and has awarded $ 200 billion in grants to domestic companies in ten high-tech sectors. Xi Jinping is holding a million Uighurs in re-education camps, has suppressed Hong Kong’s freedoms and militarily intimidates countries that resist his illegal claim to seize the entire South China Sea.
After achieving a duty-free Brexit with the UK, the EU has a small window of opportunity to forge deals with the US It will begin to close due to the German general elections in September and the French presidential elections in 2022. With the exception Of the OECD’s achievements in eliminating tax havens, since the end of the Cold War the new international organizations (G8, G20) have not achieved any substantial multilateral agreement on climate change, financial, monetary system or pandemic management. The round of trade liberalization launched by the WTO in 2001 has failed.
The European Commission declares that the US and the EU have achieved the most integrated economic relationship in the world. The EC details that the stock of foreign direct investment (FDI) of the United States in the EU is three times greater than that of all of Asia. That of the EU in the US is eight times higher than its investments in China and India. Between 2000 and 2019, the stock of US foreign direct investment in the EU has grown by 500% and that of the EU in the US has increased by 300%. Due to a ruling by the European Court of Justice, the Commission only has the power to negotiate the commercial side of EU agreements. In matters of investment and dispute resolution, sovereignty is shared with the member states. Instead of forging the transatlantic common market that Angela Merkel once pioneered, Brussels allows China and Russia to divide the free world.
Alexandre Muns is Professor at EAE Business School and international economics analyst