President Joe Biden used an odd phrase in a Feb. 4 speech when he outlined a “foreign policy for the middle class.” With Washington focused on a kooky Republican Congresswoman and the introduction of Biden’s huge relief bill, the media barely mentioned this concept that sounds like an oxymoron.
Biden might need a pithier slogan, but “foreign policy for the middle class” is his rejoinder to President Trump’s “America First” program—and the Democrats’ first-ever effort to address the woes caused by free trade. To put this idea into practice, Biden’s administration will appoint a kind of jobs czar within 30 days, develop a strategy within 60 days and establish benchmarks for measuring progress.
This could end up being weak tea, like many of the Washington task forces that issue reports but change nothing. It’s a political necessity for Biden, however, to show voters he recognizes the problems Trump tapped into in 2016 by attacking trade deals and claiming China and Mexico were ripping off Americans. And some of Biden’s top advisers have outlined a new approach to trade meant to protect American jobs while retaining the efficiencies of globalization.
Trump’s unfinished trade agenda is the obvious starting point. Trump imposed new tariffs on about $350 billion worth of annual imports from China, Mexico and several other countries. Trump claimed raising the cost of imports would lead to more U.S. manufacturing, and jobs. That didn’t really happen. Instead, importers shifted supply chains to other low-cost countries, such as Vietnam and India, not subject to the new tariffs.
Biden has signaled he plans to leave the Trump tariffs in place, using them as leverage as he forms a different set of policies. One thing he wants to do is team up with allies to confront China’s trade abuses as a bloc, instead of going it alone, as Trump did. Biden hasn’t detailed a strategy yet, but the American mood toward China has soured since President Obama left office in 2017. Obama touted economic cooperation with China, even as evidence grew that cheap Chinese production had vaporized millions of U.S. jobs. Trump successfully exploited worker frustrations on trade when he ran for president in 2016, and Biden needs to show working-class Americans he gets it, too.
Biden’s national security adviser, Jake Sullivan, has outlined what “foreign policy for the middle class” might look like. He was a co-author of a 2020 report published by the Carnegie Endowment for International Peace that called for new types of trade policy that put workers first. It noted that 30 years of globalization have thoroughly benefited big companies that can move work from country to country, and consumers who pay less for a huge basket of products. The losers, however, have been middle-class manufacturing workers whose livelihoods have disappeared, often with little relief or alternate work.
There’s no single-bullet solution. The Carnegie report makes dozens of recommendations, such as developing a “national competitiveness strategy” for creating more good-paying jobs, improving worker training and matching workers with companies that need them. Labor unions could have more input on trade deals at agencies such as the Office of the U.S. Trade Representative, where corporate America typically dominates. There could be better programs for aiding workers displaced by globalization.
Many trade experts say the United States needs better ways of addressing trade disputes, with China in particular. Complaints lodged at the World Trade Organization take years to resolve and results are often inconclusive. The United States could demand fixes at the WTO while also developing its own tools—in conjunction with allies, perhaps—to act when the WTO doesn’t. Congressional legislation that establishes those tools would make them more durable than the executive actions Trump relied on.
Biden also plans to use future stimulus bills to generate large investments in green energy and traditional infrastructure, another way to trigger job growth. And his Buy America plan could generate a bit more business for American firms.
The biggest question is whether Biden will be able to point to results by the time of the 2022 midterms, or even the 2024 presidential election. Trade deals and policies take a long time to implement and even longer to change reality on the ground. Trump’s tariffs were an exception, because he imposed those unilaterally, with little notice. But trading partners imposed their own punitive measures just as quickly, negating any benefit of Trump’s moves and raising costs in all directions.
If the economy is booming by the time voters head to the polls in 2022 and 2024, they may not care that much whether Biden’s foreign policy has generated middle-class jobs. But it’s more likely pockets of the economy will remain depressed, perhaps large pockets. Many working-class American feel they’ve been sold out, and Biden will have a tough time changing their minds.
Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. You can also send confidentital tips, and click here to get Rick’s stories by email.
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