Biden and the Democrats: Standing Up to China on Trade?

The cynical among us might tend to dismiss party platforms as a guide for future policy. But according to some political scientists, they can be a valuable reference for post-election governance.

If so, what does the 2020 Democratic Party platform tell us about the trade policy that a President Joe Biden would pursue?

In speculating, we ought to also recall the words of former aide to President Ronald Reagan Scot Faulkner: “personnel is policy.” To wit, the Biden trade policy will be framed by the trade team that is appointed.

There will likely be those from the “globalist” outlook – which generally considers trade agreements as aligned with preserving and advancing the liberal international economic order, and a counter-force to “protectionist” tendencies. We might also expect others will have more iconoclastic and skeptical views about trade liberalization, its impact on the middle class, and its relationship to income and wealth inequality.

Consider how U.S. Trade Representative Robert Lighthizer and White House aide Peter Navarro, who have served all four years in the current administration, align with President Donald Trump’s critical view of prior trade agreements. Meanwhile, former National Economic Council Director Gary Cohn, labeled a “globalist” for his trade views by Trump, lasted just a year.

Trade, especially with China, remains a top-tier issue for Trump in his 2020 re-election campaign. He had this to say about Biden and trade in his August 27 speech accepting the Republican Party nomination: “Biden voted for the NAFTA disaster, the single-worst trade deal ever enacted. He supported China’s entry into the World Trade Organization, one of the greatest economic disasters of all time.”

Given the profile of trade in Trumpism and that Trump was expected to double down on trade, especially China trade issues, for the remainder of his campaign, the 2020 Democratic Party platform tells us surprisingly little in its 80 pages about what it expects from a Biden administration trade policy.

The limited focus on trade in the platform is likely indicative of the limited focus that a Biden administration intends to give trade, at least initially, in its policy panorama. This is neither surprising, nor unprecedented. At the outset presidential administrations tend to prioritize domestic policy initiatives. Trump worked to enact a tax law in his first year, before turning to renegotiating existing trade agreements and confronting China on trade.

As a recent article by Gavin Bade for Politico convincingly reports, the message from the Biden camp is that domestic economic priorities take precedence over international trade negotiations. This is also the position stated in the platform: “We will not negotiate any new trade deals before first investing in American competitiveness at home.”

Of course, trade with China is not ignored in the platform. China is referenced as a trade concern in terms generally reflecting two themes: Trump has botched the trade conflict with China; and China’s trade practices are a threat that must be confronted, and Trump has failed to do so. There may be some cognitive dissonance here, but, after all, this is a party platform.

The framework for trade in the platform is contained in two parts. The first part is found in the strategies to build a stronger economy, titled “Building a Fair System of International Trade for Our Workers.” The second is in the section on foreign policy and advancing American leadership titled, “Global Economy and Trade.”

The opening sentence in the first part on building a fair system of international trade declares that “the global trading system has failed to keep its promise to American workers.” It then indicts U.S. companies that “have rushed to outsource jobs,” and asserts that “too many countries have broken their promises to be honest and transparent.”

The trade discussion ties one lesson to COVID-19, which “has shown the risks of relying too heavily on global supply chains.” The only reference to China in Biden’s 2020 acceptance speech is similar: “We’ll make the medical supplies and protective equipment our country needs. And we’ll make them here in America. So we will never again be at the mercy of China and other foreign countries in order to protect our own people.”

The major critique of the Trump administration’s trade policy in the 2020 Democratic platform is for “launching a trade war with China that they have no plan for winning” and which the Democrats say has “cost more than 300,000 American jobs and sent farmers into bankruptcy, decimating the American heartland.”

Criticism of the Trump administration aside, the diagnosis by the Democrats of a global trading system that has failed American workers seems to be one that the Trump administration would confirm.

The remedy offered is that “Democrats will pursue a trade policy that puts workers first.” The strategy for how to do this consists of four elements: First, include labor, human rights and environmental standards in trade agreements, building upon what was done in the United States-Mexico-Canada (USMCA) agreement.

Second, take aggressive action against China or any other country involved in currency manipulation, dumping, unfair subsidies, intellectual property theft and cyberespionage. (The platform tags Trump for not having stood up to China on these issues – which begs the question of what confronting China on trade would look like according to the Democratic Party.)

Third, the platform proposes to eliminate trade and tax policies that encourage offshoring, and require companies that offshore to pay back any government subsidies they have received.

Here again, aside from the requisite criticism of Trump, for these first three points there is arguably not a material or unbridgeable difference of views.

The fourth and final point proposed is “we will take immediate action to repair the damage President Trump’s reckless policies have done to American farmers, by working with our allies to stand up to China and negotiate from the strongest possible position.”

Here, we do see a contrast in approach. A failure to work with allies is a substantive criticism of Trump and his administration. The theme of working with allies on trade with China and other policy challenges is also found in Biden’s major foreign policy campaign speech given in New York City on July 11, 2019. An article making the same critique against the Trump administration was published in Foreign Policy in July 2020 by Pete Buttigieg and Philip Gordon.

If we look closely at this paragraph, though, its coherence seems a bit leaky even by standards for political documents. The platform commits to “take immediate action to repair the damage President Trump’s reckless policies have done to American farmers,” and the strategy to do so is “by working with our allies to stand up to China and negotiate from the strongest possible position.”

It is certainly well-advised to work with allies on global priorities, but left unstated here are what actions would be taken with the allies. Nor is it set out how working with allies to stand up to China would address the identified priority of repairing damage to American farmers.

The emphasis in the platform on working with allies to confront China on trade as a criticism of Trump also raises the not small question as to whether the Obama, Bush, and Clinton administrations failed to work with allies to that end, or tried to do so and failed.

The second section addressing trade policy is found in the part of the platform titled “Advancing American Interests” and is called “Global Economy and Trade.” It repeats most of the points in the discussion on building a fair system of international trade, often almost with the same language, including that “the global trading system has failed to keep its promises to American workers.”

Perhaps the key insertion in this section is one that does not talk about “aggressive trade enforcement” against China but rather: “Democrats believe that if the United States does not work with its allies and partners to shape the terms of global trade, China will shape them for us – and American working families and the middle class will pay the price. That’s why we will work with our allies to mobilize more than half the world’s economy to stand up to China and negotiate from the strongest possible position.”

This language about the need to compete with China to “shape the terms of global trade” is similar to language contained on the Biden campaign website, and also expressed in Biden’s manifesto for American global leadership from late January 2020 and printed in Foreign Affairs.

No doubt, the United States should lead in shaping the rules for global trade, and this seems to have been the policy of every administration since the GATT was launched in 1947. At least until the Trump administration, which prefers to focus on bilateral arrangements – the recent thoughtful op-ed by Lighthizer on WTO reform notwithstanding.

But given the U.S. trade record in recent decades, perhaps the United States might consider whether it has been successful in shaping those global rules. Democrats, in their 2020 platform, repeatedly proclaim the trading system, with rules the U.S. shaped, has failed American workers in general and failed to address China in particular.

Did not the Clinton administration see it as a success when it brought China into the WTO – under rules the United States had done much to shape with our allies and partners, and China had not shaped at all?

Are the Democrats of 2020 in some way saying the “new policy” is really the “old policy?” If not, what rules are being proposed for a trade system to benefit American workers?

The platform labels Trump’s trade policy toward China, which has consisted of penalty tariffs and the negotiation of a quantifiable agreement (which is lagging badly in results), weak and a costly failure.

That being so, the Democrats might have stated something more about what they mean by “standing up” to China. The allies they intend to mobilize for the effort will likely ask.