The stage is set for an epic trade war showdown. If Trump returns to the White House in 2024, he’s vowed to “knock out” Biden’s massive new Asia trade deal on day one in the oval office.
On the other hand, Biden is scrambling to lock it in before the next election.
With the 2024 elections looming, Americans face a clear choice between Trump’s America First protectionism and Biden’s globalist approach. The future of US manufacturing, China relations, and American influence hangs in the balance.
How did this all go down and how do Trump and Biden’s different policies affect America?
In his most recent rally in Fort Dodge, Iowa, Donald Trump, who is currently the leading contender for the 2024 Republican presidential nomination, stated that if he wins the election and returns to the presidency, he would immediately terminate a Pacific regional trade agreement that President Biden is negotiating.
The agreement in question is the Indo-Pacific Economic Framework, or the IPEF, which the Biden administration was working on in preparation for the APEC summit.
However, election-year political pressures and reluctance from some nations to make firm commitments make it unlikely the deal will come to fruition in the near future.
Trump argued that the pact would damage American manufacturing and lead to job losses, so he vowed to knock out what he called “TPP Two” as soon as he took office again.
Some of you might remember that Trump withdrew from the TPP, or the Trans-Pacific Partnership trade deal after taking office back in January 2017. Trump is right to call it the second TPP since many of the same countries that were in the Trans Pacific Partnership are also in the IPEF.
Trump did so just three days after being sworn into office as the nation’s 45th president, calling the TPP, which had been negotiated during Barack Obama’s term in office but never ratified, “a rape of our country.”
The 12 participating countries had signed off on the Trans-Pacific Partnership trade agreement on February 4, 2016, while the U.S. presidential election was just gaining momentum.
The deal included the United States along with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam as signatories. But when Trump withdrew the U.S. after taking office, the agreement could not go into effect without all parties involved.
After the US withdrawal, the other 11 participating nations renegotiated the deal into a new trade agreement known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. This revised pact kept most of the original TPP provisions and officially came into force on December 30, 2018 without the involvement of the United States.
However, Obama spoke out against the decision saying that “if we don’t pass this agreement, if America doesn’t write those rules, then countries like China will.”
Trump countered this by saying it was a badly negotiated agreement that weakened American power and influence.
He also criticized its excessive length and complexity, noting that the pact was “5,600 pages long and so complex that nobody’s read it.”
Trump argued the bloated nature of the deal and its negotiation by the Obama administration made it a disastrous giveaway of US interests.
As you might have guessed, Biden shares many of the same views about the TPP as Obama. So it’s not surprising to see him revisiting the idea with the Indo-Pacific Economic Framework.
Biden first unveiled the Indo-Pacific Economic Framework, or the IPEF, during a visit to Tokyo in May 2022. The initiative contains four main components: supply chains, climate issues, anti-corruption efforts, and trade.
Biden introduced the IPEF as a core part of his Asia policy with the goal of strengthening economic ties in the region.
“We’re writing the new rules for the 21st century economy,” Biden said when he first announced the framework. But unlike a traditional trade deal, the framework is not about expanding market access or laying out penalties for unfair practices.
The trade section of IPEF is being led by U.S. Trade Representative Katherine Tai, while the other three pillars focused on supply chains, climate, and anti-corruption are under the purview of Commerce Secretary Gina Raimondo.
In addition to the United States, there are 13 other member countries in the IPEF which collectively account for 40 percent of the world’s GDP. The other nations involved are Australia, Brunei, Fiji, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand and Vietnam, per the U.S. administration.
However, Biden’s beloved trade deal seems to be stuck at a stalemate.
While the administration hoped to reach major progress on the deal by the time of the APEC summit, that attempt to establish labor and environmental standards faltered when certain nations, like Vietnam and Indonesia, refused to agree to rigorous, enforceable commitments in those areas.
The U.S. completely abandoned the trade pillar at the last minute due to resistance from Democratic members of Congress skeptical of trade deals, such as Senator Sherrod Brown urging Biden to completely drop the trade component rather than weaken its standards.
“I’ve made it very clear that the trade portion of the Indo-Pacific Economic Framework is unacceptable, and I’m glad it’s not moving forward,” he told reporters in Washington.
There were also concerns that IPEF could be weaponized by Biden’s likely 2024 rival, Trump. The thing is, trade deals are not even popular with many voters, and many have expressed their concern over them.
Voters say past trade deals caused the loss of factory jobs that hollowed out their hometowns.
Past pacts like NAFTA have been blamed by constituents for spurring the offshoring of manufacturing jobs that gutted local economies.
Many voters feel recent trade agreements led directly to factories shutting down as production was shifted overseas, hollowing out once-vibrant manufacturing communities. They accuse past administrations of prioritizing corporate interests over protections for American workers. The resulting anger over job losses and industrial decline has made trade deals radioactive across heartland swing states.
The 2016 election marked a major turning point regarding opposition to trade deals among both parties. Candidates from the two major parties, Republican Donald Trump and Democrat Hillary Clinton, both publicly denounced the Trans-Pacific Partnership trade pact.
After becoming president, Trump renegotiated the existing NAFTA deal with Canada and Mexico, imposed tariffs on many imports, and ignited a trade confrontation with China. The 2016 race signaled bipartisan voter anger over the effects of globalization and free trade agreements.
In a speech in June, U.S. Trade Representative Katherine Tai criticized previous trade agreements. She stated that upon examining past deals, it becomes evident they helped cause some of the very issues we now aim to fix. Tai emphasized that the new trade approach sees people not just as consumers but as producers – as workers, wage earners, providers and community members that make up a strong middle class.
In the end, Biden’s IPEF deal faces major doubts and hurdles. Despite his lofty rhetoric about writing “21st century rules”, Biden is repeating many of the same mistakes that doomed previous trade pacts.
Many voters have made their anti-trade sentiments loud and clear after witnessing the destruction of manufacturing communities. Yet Biden is dismissing these concerns, forging ahead with an Asia deal opponents blast as “TPP 2”.
His administration admits past deals were flawed but arrogantly assures they’ve learned this time.
With negotiations already stalling, the IPEF appears set to share the fate of Obama’s TPP. Biden is defying political reality to chase the fantasy of a legacy-making trade achievement.
At the end of the day, Biden’s globalist tunnel vision could cost him a steep political price, with his declining support and the 2024 showdown on the horizon.
