Potential trade impact of the pending U.S. election
Now that presumptive Democratic presidential nominee Joe Biden has named California Senator Kamala Harris his running mate, the process to select the next president moves forward at full steam toward the Nov. 3 election. To understand what a second Trump term, or a Biden presidency, could look like in the trade arena, Advocacy Update spoke with Christine Sohar Henter and Edward Ayoob, NAFEM legal counsel, Barnes & Thornburg.
What can we expect from a second Trump presidency?
Christine: “A second term will further embolden President Trump, which means his rapid pace of change could escalate even more. We expect him to continue to protect domestic industries – like steel and aluminum – further encourage repatriation of manufacturing and maintain his tough stance on China.”
Edward:” If the Senate remains majority Republican and the Democrats retain the House, President Trump will use even more executive orders and we’re likely to see continued gridlock. A lasting impact will be the Republicans continued ability to confirm more federal judges who are generally more favorable toward business. This will impact regulation-related lawsuits for some time to come.”
Christine: “We’ve already seen the president make multiple decisions via executive order and presidential proclamation, apparently without much coordination with and preparation by the impacted agencies. When other presidents took such executive actions, implementing agency regulations were typically coordinated and issued more concurrently. But as we saw with the July 14 decision on Hong Kong normalization, which required, among other things that imported goods can no longer be labeled “Made in Hong Kong,” it appears that coordination with CBP was delayed, as CBP didn’t issue initial implementing regulations until Aug. 11. President Trump’s use of executive orders and other presidential actions also could have a longer-term impact on how presidential powers are interpreted under the U.S. Constitution.”
Edward: “If the Democrats gain control of the Senate, we also can expect continued gridlock. But President Trump is unpredictable. He may decide to work with the Democrats on things with broader appeal like immigration reform and an infrastructure package.”
And what might a Biden presidency have in store for the U.S.?
Edward: “If elected, we expect that President Biden will revive negotiations for the proposed Transatlantic-Pacific Partnership (TPP) agreement between the Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the U.S. that President Trump halted early in his presidency. We’d also expect him to insist on strengthened environmental and labor provisions in future trade agreements.”
Christine: “Since Joe Biden has yet to issue his trade policy, the Obama presidency gives us the closest idea of his approach. Biden will undoubtedly look to protect U.S. workers, but may not be as much of a domestic industry protectionist as President Trump. That said, President Obama certainly acted to protect the auto industry and banks during the 2008 financial crisis, as well as other industries that proved the need for a level playing field with unfair trade. We also can expect a more organized and coordinated approach between the White House and agencies around policy changes.
Edward: “If the Democrats win back control of the White House and Senate, we also anticipate modifications to the Tax Cuts and Jobs Act of 2017. We should expect increased energy-efficiency tax credits and other provisions to reduce the use of fossil fuels, as well as increases in overall taxes, perhaps by raising corporate, personal or other taxes. It’s also highly likely that we would see legislation to address climate change. We also could see bipartisan efforts to address supply chains, especially those for personal protective equipment (PPE) and other products and equipment so we are less reliant on foreign countries, especially China, for essential supplies.
Christine: “The first 30 days of a Biden presidency could see rapid change. Via presidential proclamations or executive orders, he may look to quickly rollback things like the Section 301 tariffs on imports from China, or he may retain the leverage on the country. In any event, he is more likely to build a more unified front of U.S. allies and partners to deal with China and focus on multilateral versus bilateral trade agreements. However, until we have a formal trade policy to review, all we can do is speculate.”
Edward Ayoob, NAFEM legal counsel, Barnes & Thornburg provided an update on the 2020 House, Senate and Presidential races during its Aug. 26 Wednesday Webinar. Thirty-five Senate seats are up for election this year, as well as all 435 House seats. The team shared their analyisis of likely state-by-state election results and an assessment of how the Electoral College could vote.