Biden’s order to review US supply chains proves conclusively that Trump’s America First strategy is here to stay
A poor response to recent crises and the rise of China have caused the US to consider its attitude to globalization and free trade. It seems Joe Biden is more than willing to continue the protectionist outlook of his predecessor.
Earlier this week, President Biden signed an executive order requesting a comprehensive review into American supply chains, most particularly in the areas of medical goods, semiconductors, pharmaceuticals, rare earths and batteries.
Biden stated, “The bottom line is simple: The American people should never face shortages in the goods and services they rely on, whether that’s their car or their prescription medicines or the food at the local grocery store.” He also vowed to sharpen “America’s competitive edge” by “investing here at home.”
Although the order was not directly targeted at China – in fact this was specifically denied by one spokesperson – it is hard to see it in any other light. There is a growing ‘strategization’ of supply chains, fueled by US-China rivalry, but also the changing global environment brought about by Covid-19.
Ultimately, it also signals that the era of America First, as initiated by Donald Trump, is here to stay. The era of America opting for economic globalization, for globalization’s sake, is over, and free trade is now less important than the attainment of ‘absolute gains’ and strategic security for the US. But just how attainable this is remains to be seen.
Trump is gone. As an individual, he is considered disgraced by some, but what is clear is that his political legacy is here to stay. Despite Biden’s denials, the trade and economic policy Trump created – depicting trade as a zero-sum game, favoring protectionism and ending free trade for free trade’s sake – is the new status quo.
There now appears to be a broad, bipartisan consensus that this is the way to go. Globalization is no longer framed as a given or desirable, but something now subject to political and strategic conditions which must suit American preferences, a hallmark of an evolving world and a product of the rise of China.
While the new president will not weaponize tariffs to coerce allied countries, in reality his policy in principle is the same as Trump’s: to advocate American jobs first and foremost and to avoid expanding free trade if it puts the US at a disadvantage.
As he stated, “There’s no longer a bright line between foreign and domestic policy. Every action we take, we must take with American working families in mind.” But this is only part of the picture. The struggle with China and the pandemic have also transformed the outlook on global supply chains. It is not just a question of who wins and loses anymore, but also a matter of strategic interest and national security. There has been a realization that certain supplies, as opposed to trade as a whole, and who controls them, matter immensely.
The pandemic has served the purpose of shattering global supply chains through economic shutdowns throughout the world, and also created disproportionate demand on certain goods and aggressive competition between states, which has forged a mentality of ‘every man for himself’.
For example, last year the US and European countries were battling each other over personal protective equipment (PPE) from China to the point Washington was accused of “modern piracy.” And recently countries in the West have also been competing over vaccines. Supply chains are becoming a win-lose game, which is sharpening the focus on national interest.
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The early 2000s, when economic globalization arguably peaked, took consumerism and accessibility of supplies for granted, and so focused simply on affordability. Now, however, that world does not exist any longer as it has been upended by geopolitics and crises. As a result, Biden is highlighting a number of strategic sectors that America is deemed vulnerable to.
His review will likely recommend actions that allow the US to reconfigure supply chains that it can control politically. Some of them, such as medical supplies, are to ensure adequate responses to future crises. Others, such as semiconductors and rare earths, are very much related to China. Beijing itself is doing similar in the wake of the technology war Trump opened up, and the European Union wants to increase its own sovereignty in these areas too.
But much of this is easier said than done. Biden talks about ‘cooperating with allies’, but this is a mere soundbite that doesn’t really address the issue of how you build coordinated supply chains when the emphasis is solely placed on benefiting the US. The subtle economic competition with the EU is one clear faultline in this rhetoric.
Then there is the issue of reconfiguring an economy which is still designed to gravitate toward the most profitable options. American industry declined because it was more affordable to produce abroad, a result of the neoliberal “new right” economics created by Ronald Reagan in the 1980s. You cannot undo that without changing the system completely, and one wonders – despite all the talking – if the US has the political will to do so, especially given the scale of investment that would be needed and the effort that would be required to ‘control’ a completely free market economy.
Let’s put it this way: America can’t become another China. So, while Biden might have big aspirations, for now they remain only that, and the executive order itself is only a vision as opposed to a serious path of action.
The US may have a new outlook in trade and supply chain policy, a by-product of a changing world which has moved away from globalization as we once knew it. But it does not have a roadmap to put it into action. America First is here to stay, but that doesn’t mean ‘America in first place’ is any guarantee.
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