EU Disputes, Erosion of Steel Prices Globally Will Continue to Plague Biden Administration, Experts Say

In a Joe Biden administration, some tariffs can be unilaterally withdrawn, but others would require complex negotiations to sort out, said Peterson Institute for International Economics nonresident senior fellow Anabel Gonzalez. She asked PIIE Senior Fellow Chad Bown and former U.S. Trade Representative Michael Froman where they think the new administration's energies should be directed, during a Nov. 18 webinar.

Bown raised the idea that instead of using Section 232 tariffs under a guise of national security, the U.S. should open a discussion at the World Trade Organization about raising bound tariffs on steel and steel products. “We’ve made no progress in tackling the overproduction” through multilateral discussions on overcapacity in steel. “If we don’t fix the underlying systemic problem with China, we could very shortly end up at the same place,” even if the Section 232 tariffs are lifted on European countries and Japan.

Froman, now vice chairman in charge of strategic growth for MasterCard, focused on digital trade as a less politically sensitive issue than broad free trade agreements. (Open data flows are important for financial services.) “I don’t advise the Biden transition,” he clarified, before he said that he thinks there ought to be a landing zone at the WTO for appellate body reform. Froman does not believe an FTA with the United Kingdom should be concluded until the trading relationship between the European Union and the U.K. is clearer.

Although he said trade policy won't be erratic in a Biden administration, as it has been under Trump, he said that doesn't mean Biden will accede to allies' points of view on trade. “I do think there is actually a high risk of miscalculation by our trading partners -- including in Europe -- that everything is going to be sweetness and light going forward,” he said. “Issues need to get resolved and not get swept under the carpet.” Froman added: “With the EU there are a lot of outstanding issues, and increasing every day,” such as digital service taxes, carbon border adjustment and the Airbus-Boeing dispute.