If Donald Trump has illustrated anything as president, it’s that the postwar global economic order is more fragile than anyone thought. Think of America’s trading relationships and rank in the world as a painstakingly assembled collection of delicate pottery that for generations has been a source of civic pride and envy from the neighbors. Trump and his deputies have been the raucous gang of teenagers barging their way through, leaving a trail of chipped and smashed artifacts. President-elect Joe Biden is the genial grandfather leading a new team brought in to mend what they can. The questions now are: How much will they save? And how creative will they get in the reconstruction?
The good news for a global economy straining under the weight of a resurgent pandemic is that Trump and his band haven’t destroyed the liberal order, as many feared. They’ve left it battered. Perhaps they’ve even prepared its defenses better for another economic assault from China. But anyone thinking that Biden is simply planning to rebuild the U.S.-led order the way it was might be in for a surprise.
Trump’s biggest legacy for many of those who run the global economy and invest in it will be late-night stress dreams about his chaotic policymaking. Yet Trump and economic generals such as U.S. Trade Representative Robert Lighthizer have also scrambled the American politics of trade, opened the door to a new suite of tactics and tariffs, and brought to the fore what in many cases have been long-standing and bipartisan U.S. grievances. When Biden speaks of the need to “build back better,” he might be talking about the global economic order as well. It’s something he and his advisers have mulled for years.
“The system’s resilience should not be the end to a comforting story; it should be the starting point of a badly needed effort to reinforce and update the international order and address the real threats to its long-term viability,” Jake Sullivan, one of Biden’s closest policy advisers, wrote in a 2018 Foreign Affairs article titled “The World After Trump.”
The words “trade” and “economic order” don’t feature once in an economic recovery paper posted by the Biden transition team. Instead, the document echoes Trump’s promise to restore U.S. industrial might. It vows to “mobilize American manufacturing and innovation to ensure that the future is made in America.” It also stresses “the importance of bringing home critical supply chains” and pledges to “build a strong industrial base.” That fits with what advisers say is Biden’s plan to focus on making sure the U.S. approaches its relationships with everyone from China to allies in Europe from a position of domestic economic strength.
Rather than relying on new defensive trade barriers as Trump has, Biden’s plans hinge on encouraging investment at home via tax incentives for companies to build factories in the U.S., and government spending on infrastructure and alternative energy to boost demand. The underlying idea is that a stronger, more confident U.S.—rather than a belligerent one—can turn around the narrative that it’s a declining superpower, according to multiple advisers who spoke on the condition of anonymity.
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