In general, relations between the United States and Europe have improved over the past three years. The unifying effect of the war in Ukraine played a large part in this, but the gap on trade and economic issues remains large. European countries are complaining about the implementation of a series of programs announced by Joe Biden to strengthen the US economy. The Rescue Plan, the Infrastructure and Jobs Act, the Chip Act and the Inflation Reduction Act have brought generous subsidies, large budget allocations and tax cuts aimed at attracting foreign investment from Europe to the United States.
These plans will cost nearly $4 billion and aim to revitalize the country's industrial heartland, which won Donald Trump the election in 2016. It is clear that it is not working as it was intended, because this year it will be these regions that will once again vote for the Republican candidate. The fact is that Biden has tried to differentiate himself from his predecessor in many areas, but not in the commercial area. Like Trump, Biden wanted to boost the national industry by embracing the old “Buy American” slogan so popular with Republicans. Trump's tariffs on European steel remain in effect and the trade war with China continues. Biden has made no attempt to return to the Trans-Pacific Partnership, which the U.S. withdrew from in 2017, and the new trade deals he has proposed do not provide preferential access to the U.S. market. In many ways, Biden has continued and even expanded the protectionism of the Trump era.
This protectionism has real costs because the tariff paid at the border is ultimately passed on to end customers. But that's not all. Such policies often waste taxpayers' money on pipe dreams, reducing the competitiveness of companies and isolating the economy. The response to protectionism is more protectionism from other countries. This has happened with the European Union, Japan and South Korea, which are replicating the same measures to apply on their territory. In Europe, the Commission is advocating easing its strict regulation of government subsidies to companies so that they can compete on a level playing field with American companies that receive government subsidies from one of the Biden-backed programs.
In an election year like the one we are in, many things are discussed on the campaign trail, but global trade doesn't seem to be one of them. The two main candidates have some notable differences in their respective programs, but when it comes to trade there is little difference, they are like two drops of water. There, Biden's vision of the world is the same as Trump's. The president and his economic team believe unrestricted international trade poses a threat to national security. They believe that globalization in recent decades has destroyed America's industrial base, hurting its workers and allowing China to control key industries. This was one of the pillars of Trump's program in the 2016 election campaign, a program that ultimately became state policy.
In reply:
- The forum of Davos
- The immigration and Brexit
- The candidate Trump card
