A global pandemic. An economic crisis. Two contrasting visions of a future America. The stage is set for one of America’s most contested elections in recent history. And it is hardly surprising; Donald Trump’s election win in 2016 came as a shock to most political commentators. His presidency has not disappointed either, having not been anything but unorthodox.
From trade wars to corporate tax cuts, multiple supreme court nominations and overseeing years of sustained economic growth, the Trump administration has enjoyed a number of achievements since their election victory in 2016. Although the Trump presidency has had its own plethora of difficulties– from the administration’s poor response to the COVID–19 pandemic to its inflating of tensions during protests against racial injustice following the killing of George Floyd, Trump has more than his fair share of critics. Historically, incumbent presidents in the US are more likely to win reelection. However, this year is special.
One of the reasons Trump won the 2016 election is that he offered many disillusioned Americans a different vision of the nation– a US that was less globalist, economically prosperous and that protected American industries. In regard to economic growth, the Trump administration (prior to the pandemic) exceeded expectations. Real GDP in the US grew by an average of 2.5% between 2017-19, outperforming forecasts released by the International Monetary Fund prior to the election in 2016. This was, to some extent, due to Trump’s corporate tax cuts. Additionally, America’s labour market also improved in that period, with President Trump overseeing America’s lowest unemployment rate in 50 years, as well as the largest increase in the wages of the lowest-paid American workers since Bill Clinton was president.
Despite the USA’s healthy economic growth prior to the COVID-19 pandemic, the Trump administration’s mismanagement of the pandemic and the subsequent economic fallout has in part resulted in an election that will be highly contentious, with the Democratic nominee and former vice-President Joe Biden looking to replace President Trump in the White House.
What happens in the US directly and indirectly affects billions of people on Earth. Leaders around the world are watching eagerly to see which of the two candidates the American people will elect, with both leaders having very different plans for the future of the US, both domestically and internationally. So, let us look at some of the key areas of concern and see how a Trump and Biden administration would affect key issues relevant to the wider world.
The Environment, Climate Change & Energy
There is a wealth of scientific literature confirming the validity of climate change and dangers it poses to the human race and the biodiversity of our planet. For most of the world, climate change is recognised to be a fact, and many nations have made strides to reduce their greenhouse gas emissions. For instance, over 190 countries signed The Paris Agreement in 2016, in which countries have committed to cutting their greenhouse gas emissions to a level that would reduce the rise in the global average temperature to well below 2 °C (3.6 °F) above pre-industrial levels; and to pursue efforts to limit the increase to 1.5 °C (2.7 °F) by the end of the century, avoiding the catastrophic environmental changes that would stem from climate change.
Trump, however, withdrew the US from the Paris Agreement and repealed the previous Obama administration’s key climate policy, the Clean Power Plan, which was set to impose the first-ever limits on carbon pollution from US power plants. Furthermore, Trump has carried out a series of rollbacks on environmental regulations, such as the “Waters of the United States” regulation, to help stimulate growth in the fossil fuel, real estate and industries. Repealed in July 2020, Trump replaced the regulation with the “Navigable Waters Protection Rule”. The regulation has enabled landowners and property developers for the first time in decades to dump pollutants such as pesticides into hundreds of thousands of waterways, and destroy wetlands for construction projects.
“The Biggest Loss of Clean Water Protection the Country Has Ever Seen”Blan Holman, an attorney with the Southern Environmental Law Center, describing the Navigable Waters Protection Rule
The new rule raises the risk of contamination for millions of Americans, a stripping of protections that were implemented in the 1970s and 1980s to ensure Americans had access to uncontaminated drinking water. Even the federal government’s own advisory board of scientists warned that the new rules neglected established scientific evidence.
Other policies pursued by Trump, such as the ending of an Obama-era freeze on new coal leases on public lands, will help coal mining companies have a wider range of areas to mine coal from, giving them the opportunity to set up mines on cheaper terrains with larger coal deposits, which they would have otherwise been unable to access. Additionally, the loosening of offshore drilling safety regulations and removal of the requirement for oil rig owners to show that they can cover the costs of removing rigs once they stop producing oil, have helped and will continue to assist oil companies on cutting down on regulatory compliance costs, making it cheaper to explore and set up new oil wells. Fewer regulations will help oil companies reduce the already high costs associated with oil drilling and exploration.
Trump’s attempts to help revive the coal industry ignore the sector’s inevitable decline. Arguably, there is method behind the madness of the Trump administration’s deregulations: the oil industry supported 9.8 million jobs– 5.6% of America’s workforce, according to PwC in 2012. An accelerated decline of the industry would put millions of jobs at risk. However, the oil industry, despite it having a key role to play in the global economy for decades to come, has shown that it is highly volatile, entangled with geopolitics and is a direct contributor to climate change. The fall in oil prices earlier this year, the wave of bankruptcies in the industry in the US oil sector illustrates the need for the US and the world to begin a shift away from an over-reliance on oil for jobs and energy.
Notwithstanding, the Trump administration’s rejection of climate change legislation and policy, the general trend in the US and around the world has been that of steady growth for renewable energy. For example, renewable energy consumption exceeded the amount of coal energy consumed for the first time in 2020. Despite the fossil fuel sector enjoying a more favourable regulatory environment under Trump and the Republican Party, the move away from fossil fuels seems inevitable.
In sharp contrast to Trump’s stance on climate change and the environment, the Biden camp views climate change not only as an issue that requires global cooperation, but also as an opportunity to create millions of new, well-paying jobs.
“When Donald Trump thinks about climate change, the only word he can muster is ‘hoax’… When I think about climate change, what I think of is jobs.”Democratic Presidential Nominee Joe Biden
In sharp contrast to President Trump’s approach to climate change and environmental reform, Biden promised in July a $2 trillion clean energy stimulus plan, designed to pivot the US toward green energy and away from fossil fuels. For instance, Biden has promised to rejoin the Paris Agreement, increase federal spending on clean energy assets like batteries and electric vehicles by $400 billion, and increase funding for US-led research and development on areas such as clean energy, clean industrial processes and transportation.
Biden’s plans are ambitious. However, there is a need for greater clarity as to how a Biden administration would go about obtaining and releasing $2 trillion in investments while keeping in mind concerns regarding the growth of the USA’s federal deficit in recent years. Nevertheless, a Biden presidency would almost definitely be one that would be beneficial for the renewable energy sector. Increased spending on clean energy R&D will further accelerate advances in clean technology and allow for a faster, global transition toward renewable energy.
The Issue of China
With a GDP of nearly $14 trillion, China is the world’s second-largest economy by GDP and is steadily closing in on America’s dominance on the world economic (and military) stage. From the Belt Road Initiative (BRI) to the setting up of the Asian Infrastructure and Investment Bank, the Chinese state is ambitious- and that is what worries much of the world, especially its neighbours.
And, arguably, they have every right to be worried: flying military jets over Taiwan, human rights abuses in Xinjiang and Hong Kong, disputes over the South China Sea as well as the exchange of gunfire with Indian soldiers, many in the Asia-Pacific region are worried of China’s growing influence in the region. Despite it lacking the soft power that the US has historically been very good at garnering, China is (or at least claims) to be the top trading partner to 130 countries and regions, and with that comes considerable leverage.
The rise of China’s punishment diplomacy in particular – a trend by the Chinese to use sanctions to coerce other countries to behave in ways that are beneficial to their state – is of increasing worry to many nations around the Asia-Pacific region. For example, when the Australian government called for an independent investigation into the origins and initial handling of COVID-19, China responded by banning Australian beef and issued “anti-dumping” taxes on Australian barley and wine exports in a possible attempt to silence the Australian government’s inquiries into China. Such behaviour is making China’s neighbours increasingly anxious over the country’s actions in the region.
“We can’t continue to allow China to rape our country, and that’s what they’re doing. It’s the greatest theft in the history of the world,” said the then Republican Presidential nominee Trump during his 2016 presidential campaign.
In Trump’s tenure as President so far, he has been immensely critical of China and tried to push back against its growing influence in the USA. He waged a trade war on China, imposing more than $360 billion (£268 billion) worth of tariffs on Chinese exports to the US in an attempt to reduce its reliance on China for key materials for economics and national security. In May 2019, Trump blacklisted Chinese telecom giant Huawei from developing its 5G telecoms network in the US for ‘national security purposes’.
Since then, other countries, most recently, Sweden and the United Kingdom, have also followed suit and banned Huawei from accessing their 5G networks. Lastly, the Trump administration also has plans to ban Chinese mobile apps like TikTok and WeChat from American app stores. Trump’s rhetoric against China is likely to have a lasting impact on the US, regardless of who wins the November election. The Trump administration has pushed back against the growing Chinese influence in the USA, taking steps to reduce its reliance on China for key materials needed for economic and national security, through actions such as banning Huawei from developing its 5G telecoms network in the US. If Trump wins, we can expect more tension and conflict with China- what some have termed ‘A New Cold War’. Trump has shown throughout his first term that he is willing to go toe-to-toe with China and his stance on China will likely continue.
This directly affects the potential strategy and foreign policy of a Biden administration. Biden is unlikely to make significant foreign policy moves regarding China in the first few months of his presidency. Rather, his focus would be on containing the COVID-19 pandemic in the US and therefore, we are unlikely to see a significant shift on the United States’ policy toward China in the short term. However, Trump has cemented Sino-scepticism in the US political scene and Biden will be very cautious in any form of rapprochement with the Chinese state. This means that the removal of tariffs on Chinese goods will take time. The former vice-President would not want to look weak on China, but crucially, it would use the tariffs as leverage to force concessions from the Chinese state– whether that be on issues regarding human rights, mainland China’s actions in Hong Kong or its wider actions in the South China Sea.
“I view China as a competitor”Joe Biden in an interview with CNN
However, there would be considerable scope for a Biden administration to capitalise on the inability of China to form more cooperative arrangements with many of its trading partners. Some even suggest that many of China’s current trading partners would be happy to move back to the familiar US.
“America doesn’t get to veto China’s rise, only to reckon with it”David Wertime, editorial director at POLITICO
With that said, China’s continued rise cannot be ignored. While most of the world’s economies are going to shrink, the Chinese economy will grow. Its continued economic growth means that it will continue to be a problem for the USA and the rest of the world. With Trump, the world will have an America with a continued aggressive stance on China, but without the necessary network of alliances to deal with the state’s ascendancy on the global stage. As previously mentioned, there is a reason for Trump’s aggressive approach to China. The Communist state’s military actions and aggressive behaviour towards its neighbours is concerning indeed. More importantly for Trump, his portrayal of China as stealing American manufacturing jobs in 2016 had been effective in wooing swing-state voters to elect him on a political platform that promised to bring back blue-collar jobs and revive American manufacturing.
With Biden, we may see a US that will try to form a global response to China, but as of now, Biden’s strategy toward China is less clear and like Trump, he vacillates between protectionism and cooperation.
Trade: 50 shades of Protectionism?
“The era of economic surrender is over.”-Donald Trump on trade during his first State of the Union speech to Congress
During his presidential campaign in 2016, Trump vowed to “put America first”, even if it meant to the detriment of others, and he did just that. Withdrawing from the Trans-Pacific Partnership on his first day in office, he then later imposed tariffs on the EU and Canadian aluminium exports, both in the name of America’s national security. He raised average tariffs on Chinese exports between 2018-20 from 3% to 19%. And through the appointment of Robert Lighthizer as United States Trade Representative to the World Trade Organisation (WTO), the Trump administration has taken steps to undermine the functioning and legitimacy of the WTO: in 2018, the Trump administration withheld support for the appointment of new judges onto the WTO appellate body, the final arbiter of trade disputes. This has led to the WTO being unable to adjudicate on trade disputes, impairing the WTO from performing its function as an enforcer and promoter of free trade.
Albeit, the President’s protectionist stance has reaped benefits for the US. For example, the Trump administration secured a “phase one” deal with China that provided American exports of pork, beef and dairy access to Chinese markets and some openings for American financial services and an option to reinstate tariffs if China did not adhere to the agreement.
Another Trump presidency would mean more of the same, with increasingly protectionist measures and a continued reticence from the Americans to participate in global economic institutions. With the world economy forecasted to shrink by as much as 8% this year, a continued American retreat from the global economic system will result in a slower and weaker global economic recovery. For decades, the world has benefitted from greater levels of trade and market access. A strong, sustainable economic recovery will depend on increased trade and fewer barriers to entry, not more.
Fewer barriers to entry allow for industries and countries around the world to be able to trade with each other more easily. If one country (country A), for example, can produce a good or service, like cars, at a cheaper and more efficient rate than another country (country B), then that country’s automobile industry is likely to grow, employ more people who will have stable employment. Growing industries in one nation can catalyse growth in other countries. Keeping with the example of the car industry, although country A produces cars more efficiently than country B, country B may have an abundance of raw materials such as iron to supply to country A. Therefore, both nations would benefit from trading with each other in the absence of tariffs or other barriers to trade designed to restrict trade between the two nations, which would be detrimental to both countries.
With the incumbent president, from undermining the WTO to waging tariffs on allies and the blatant reneging of longstanding trade agreements, a world with fewer barriers to trade is unlikely to be the case.
Build Back Better?
However, a Biden presidency is unlikely to provide the world with a Marshall Plan-esque stimulus to bring the world back to its feet. The reality is that the US faces a myriad of domestic challenges, and that will be the main focus of a Biden presidency. Biden’s economic plans, at least in the short term, would likely worsen trade conflicts.
“We will not purchase anything that is not made in America”Democratic Presidential nominee Joe Biden speaking to CNN
For instance, Biden wants a $400 billion “Buy American” procurement scheme focused on American-made infrastructure and green energy technology. Although extremely popular among American voters, this will further cement America’s slow resignation from its position as the world’s beacon for free trade. When Biden told CNN that under his administration, the US government would not purchase goods from foreign manufacturers, he added that he would fulfil that promise by closing loopholes that allowed the US government to purchase manufactured goods from other nations. These loopholes include long-standing trade commitments by the US under WTO rules and obligations stemming from trade agreements with nations such as Canada, Korea and Australia. To close such loopholes would again encourage governments worldwide to increase barriers and slow economic growth.
Both candidates have their issues, and in regard to trade, they both represent a time of relative isolationism by the US. With that said, another 4 years of the Trump administration will accelerate the descent into protectionism and slower economic growth, but this does not mean that a Biden administration would be the messiah of global trade and capitalism. Although Biden is not on the same extreme as Trump, both candidates are illustrations of the USA’s overall desire to look inward. Regardless, to ignore the colossal nature of the election would be a denial of reality. As previously stated, what happens in the US reverberates around the world, from protests against racial injustice that were echoed across the Western world to the emboldenment of populists across the world. It is hardly an exaggeration to claim that the upcoming election may well define the 21st century. As it stands, the majority of polls and models predict a Biden win, but election polls in 2016 indicated a Clinton win that never transpired. Whether those predictions hold true will be known very, very soon.