"WASHINGTON -- President Biden's goal of repairing frayed relations with European and Asian trade partners is coming into conflict with his other priority of putting U.S. workers first.
What the White House calls its "worker-centric" trade policy has led to clashes with Mexico and Canada, which objected to the administration's plan to give higher tax credits to electric vehicles built by American union workers.
Asian allies like Japan and Australia are increasingly frustrated with the lack of interest from Washington in joining regional trade agreements to counter China's growing influence. The United Kingdom and Japan are still awaiting lifting of Trump-era steel and aluminum tariffs.
At the heart of these conflicts is the sway progressive Democrats and labor unions hold with Mr. Biden, economists and others say. About 56% of union households voted for Mr. Biden, according to AP Votecast, which conducts voter surveys, compared with 42% that voted for Donald Trump.
Unions tend to favor tariffs on imports and "Buy American" policies that increase domestic production. They also generally oppose trade agreements, believing they lead to lower wages and job losses for American workers.
The pursuit of the worker-centric policy could come at the expense of establishing U.S. global leadership on trade, said Ed Gresser, a former senior policy official for the U.S. Trade Representative's Office during the Obama, Trump and Biden administrations.
"The administration wants to show America's back," said Mr. Gresser, now vice president of the Progressive Policy Institute, a nonprofit think tank."It will be much harder to achieve that if what we're seeing is the U.S. not participating in trade policy discussions and remaining in more nationalistic and more fearful mode."
Adam Posen, president of Peterson Institute for International Economics, a pro-trade Washington think tank, said Mr. Biden's trade policy protects traditional manufacturing workers while raising costs of imported goods for U.S. businesses and consumers. Mr. Posen said Mr. Biden's policy panders to "white-male industrial work" and "makes things worse with allies and more expensive for consumers."
The Biden administration says that it has resolved disputes with the European Union and boosted economic cooperation with the "Quad" nations including Japan, Australia and India.
The policy to give priority to domestic spending to help workers and communities "in no way prevents us from the important work of aligning with allies and partners," a senior administration official said. "We don't see a conflict."
Mr. Biden wants to enlist the support of trading allies and other countries in dealing with China. He was critical of Mr. Trump's trade policy, calling it a unilateral approach that angered longtime trading partners. Mr. Biden said he would work to repair those relations and enlist the support of allies in dealing with China.
But Mr. Biden has also angered U.S. trading partners. As part of his now-stalled Build Back Better plan, he proposed more generous tax credits for electric vehicles built in United Auto Workers union factories than those made elsewhere.
"The way they formulated this incentive really, really has the potential to become the dominant issue in our bilateral relationship," Canada's deputy prime minister, Chrystia Freeland, told reporters last month.
A bright spot for the Biden administration's trade relations is Europe. U.S. Trade Representative Katherine Tai eased a longstanding dispute over commercial aircraft subsidies, lowered tariffs on European steel and aluminum and set up a new framework to discuss emerging technology issues. Resolving the aircraft and metals disputes eliminates billions of dollars in enacted and threatened tariffs and counter tariffs.
USTR spokesman Adam Hodge said that allies have expressed support for trade policy emphasizing workers. "We will continue working with them to create inclusive prosperity for workers in America and around the globe," he said." [1]
If the Landsbergiai hope that cheap Lithuanian workers will flood America with goods, then the Landsbergiai are wrong.
1. U.S. News: U.S. Trade Policy Rankles Partners
Hayashi, Yuka. Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 30 Dec 2021: A.2.
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