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Damon Pike, international tax principal and leader of the customs and international trade practice of BDO, discusses what are likely to be the differences and similarities between the Trump and Biden administrations’ approaches toward trade.
Don’t expect the Trump-imposed tariffs on goods imported from China to be removed any time soon, says Pike. The incoming administration will be spending its early days devising a global strategy for trade, including an emphasis on working with its traditional allies to oppose what it sees as unfair practices by China. After 2021, Pike says, there could be a phased reduction in tariffs, based on measurable progress by China toward meeting U.S. demands.
The Biden Administration is likely to depart from the approach of its predecessor as it seeks stronger and more coordinated ties with its allies, Pike says. One big priority will be conclusion of a new bilateral free trade agreement with the U.K., which is struggling to sort out its international trade relations having finally separated from the European Union. But for President Biden to make any progress toward negotiating new trade pacts, he’ll need to obtain trade promotion authority from Congress – a capability that used to be routinely granted to the sitting president, but has become more politicized in recent decades. The failure to renew TPA when it expires in July “would stymie any further free trade agreements that Biden would want to negotiate, including the nearly finished one with the U.K.,” Pike says.
Whether the U.S. can return to a multilateral approach to negotiating trade agreements remains to be seen, although Pike believes that the controversial Trans-Pacific Partnership, from which it withdrew under the Trump Administration, “is dead, with nails in the coffin.” In the future, he predicts, “all you’re going to see are bilateral agreements.”
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