Free Trade Is Over

The United States is emerging from this presidential election as divided as ever: geographically, ideologically, and economically. Democratic nominee Joe Biden, who for now seems to have the edge to secure the White House, would have needed a solid congressional majority to implement the ambitious fiscal and environmental agenda to rebuild America that he ran on.

Controlling the House of Representatives will not be enough. Thus curbed in his ability to pursue his broader agenda, Biden will likely at least try to shield the American middle class from global economic turbulence through trade policy. In short, whether Biden or President Donald Trump eventually triumphs, protectionism is here to stay.

Four years in power have allowed Trump to engineer the most abrupt shift in U.S. trade policy since World War II, marking its departure from the rules-based trading system that Washington had established over the previous seven decades. A Biden presidency would lead to a partial normalization in trade relations, marking a return to a more multilateral and less transactional approach. But even before messy electoral outcomes became likely, it was foolish to expect him to repudiate Trump’s protectionist legacy.

From the very beginning, Biden made clear that “economic security is national security.” In that framework, domestic issues, primarily the regeneration of the American middle class and small businesses, would always top his agenda, especially amid the ongoing COVID-19 pandemic. It makes sense then that protectionism has crept into his platform. The candidate’s “Made in America” agenda hides veiled forms of protectionism aimed at promoting goods and services that are produced domestically. Under the “Buy American” slogan, for example, he envisages $400 billion in government procurement investment that would target goods and services provided exclusively by U.S. businesses. And consider his proposed carbon adjustment fee against countries that fail to meet their climate and environmental obligations. That is nothing more than a tariff.

Even beyond efforts like these, which would actually reinforce protectionism, there is the simple political fact that, on entering the White House, Biden would have a hard time unrolling Trump’s protectionist measures or launching new free trade agreements.

Although Biden blamed Trump’s tariffs for hurting the U.S. economy, he would have to perform a complicated balancing act to lift them. This is especially true when it comes to China because he is backed by labor unions, which want jobs protected from Chinese competition, but also by farmers, who want to regain access to the lucrative Chinese market. In an attempt to build a common front against China, Biden might lift tariffs on aluminum and steel produced by European companies. That might look like a win for free trade, but such a concession would likely be made conditional on NATO spending commitments, a shared reform of the World Trade Organization, and reassurances concerning 5G deals with Beijing.

Finally, even if the political will were there to forge new trade agreements, it would take years to do so through the normal processes—even though Trump has had a habit of just declaring them. According to the Peterson Institute for International Economics, it takes on average one and a half years to negotiate a free trade agreement with the United States and then more than three and a half years to reach the implementation stage. More complex, multiparty agreements like the Trans-Pacific Partnership (from which Trump withdrew) can take almost a decade.

In short, if Biden wins, Trump’s confrontational protectionism may give way to a more selective form—focused on specific issues like the environment, aimed at the protection of U.S. manufacturing, and targeted at real geopolitical rivals. But the days of free trade are over.