First 6 Months of Biden’s Trade Policy — Concerning.


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The Biden administration’s early policies toward China, global trade, and the WTO have proven to be attuned to the newer developments of the times. In practice, however, these policies are a bit concerning.


There has been no wholesale de-Trumpfication of the US trade policy. The administration has not immediately rejected many of Trump’s chaotic trade policies. It has recalibrated some of them and extended others. It has clearly put China at the center of its policies, raising the importance of human rights. However, it is disappointing that the administration is keeping some of the most grievous policies (Section 232 steel tariffs) and not addressing others, most notably the WTO’s dispute resolution system, which represents the core of an international rules-based trading system. In fact, both the Trump administration and the new Biden administration have been oblivious to the filing of new matters.


Biden’s policies toward China keep many of Trump’s signature policies in place, including the Phase One Trade Deal. President Biden has also kept Section 232 (steel tariffs) and Section 301 (tariffs on Chinese goods). Indeed, while imposing new sanctions because of human rights violations concerning the Uighurs, which reflects core American values, he extended restrictive investment measures on Chinese firms.  His administration is now exploring a new application of Section 232 tariffs on China related to the import of rare earth elements and new sanctions over China’s actions (its new National Security Law) concerning human rights in Hong Kong. President Biden is now also grappling with the US sixty-year-old sanctions on Cuba in light of recent historical demonstrations in Cuba for greater human rights and freedom.


     Biden’s policies toward the WTO have essentially been uninspiring. He has not reversed Trump’s destructive policies relating to the WTO’s dispute resolution system including its Appellate Body. The Biden administration has continued to follow the later Trump policy of not filing actions in the dispute resolution system against China or any other country. This is contrary to Biden’s often-stated goal of following and enforcing global trade rules and supporting the global system. Dispute resolution is at the core of the peaceful settlement of trade disputes that could otherwise spin out of control.



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The G-7 has taken the first step in restructuring the global tax regime. This is the first international effort in decades. This has huge implications for global commerce (especially tech firms). Taxation of global groups & transactions is complex. Global trade issues are intricately related to international tax rules. Much beyond tariff taxation. Lot of work still needs to be done. Especially as to the minimum corporate rate, source taxation (location of economic activity) and settling issues of digital taxation. Drafting a code, national adoption and national implementation are huge next steps. For example, getting the eventual agreement through the U.S. Congress especially if it’s a formal treaty that require 2/3 vote of the Senate. But this is necessary to stop tax evasion, tax avoidance and a global race to the bottom. Ensuring tax compliance by multinational corporation is essential for an equitable economic system.

G-7 and Global Corporate Taxation.” New York Times (June 5, 2021).

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An excellent assessment of President Biden’s tariff actions (and non-actions) during the first 100+ days appeared as a recent op-ed in the Washington Post. Here are some excerpts:

…. Biden’s first four months in office have seen an abrupt reversal in a number of his predecessor’s policies, but Trump’s costly record of reckless tariffs remains intact.

…. This unexpected failure to act has very real consequences.

…. Biden has trumpeted their commitment to reviving a rules-based global order based on negotiated commitments and standards — a clear and unambiguous rejection of Trump’s unilateralist approach.

…. Previously, the United States would lead the way in negotiating under established trading rules and referring trade disputes to the World Trade Organization (WTO), where Washington has historically enjoyed a high rate of success. But Trump, disdainful of multilateral organizations, trashed the WTO’s reputation and sabotaged its operations.

…. The administration needs to take steps to repair U.S. trade policy — and do it now.

…. A strong case can also be made for immediate steps to cancel the tariffs the Trump administration imposed upon China — and which quite predictably triggered retaliatory measures against U.S. exporters.

…. Returning U.S. trade policy to traditional norms doesn’t mean restoring the mantra of free trade, but reversing Trump’s unilateral policy errors will provide a more workable foundation to promote the kind of jobs-promoting fair trade that the administration favors.

“Trump’s Reckless Tariffs Remain Intact: Biden’s Failure to Reverse Them has Real Consequences.” Washington Post (May 24, 2921).

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BIDEN’S TRADE POLICIES — More Needs to be Done, Now.


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President Biden’s recent trade actions amount to more than a mere recalibration of Trump’s trade and tariff policies, though they certainly are not a grand reversal of them. Biden needs to more fully address trade policy now. Engaging the global economy is critical to promoting economic development in the United States. Furthermore, trade policy is more than just trade. It involves foreign policy, national security, human rights and more.

However, President Biden’s actions so far indicate starting a somewhat newer path in addressing systemic issues in the global system and the United States’ interface with that system.

Biden’s policies are a bit tougher on China than I thought they would be. In particular, he has not removed Trump’s Section 232 and Section 301 tariffs. However, he has made thoughtful international tax proposals and has discussed more multilateral engagement and has promised more bilateral and multilateral diplomatic consultations. That said, he has not done much yet concerning the WTO and its dispute resolution system. 

We have not had much movement in joining newer regional arrangements (such as the revised TPP), but there has been more emphasis on human rights (and use of trade sanctions to promote them). That’s good. Biden has a major focus on increasing the United States’ competition (not confrontation) with China and has suggested domestic policies to better engage in the global economy. However, elements of his own party have hampered him in taking bolder trade actions. This needs to be addressed. There has even been a hint of protectionism in Biden’s Buy American proposals and there is a serious question of their legality under WTO and international trade law.

Here are some of the most recent U.S. trade developments:

  • The EU has recently shelved plans to increase retaliatory tariffs on U.S. imports because of Trump’s Section 232 steel tariffs, with the hope of negotiating better U.S. trade relations.
  • There have been newer negotiations with the EU on resolving the feud over subsidies for Airbus and Boeing. Again, retaliatory duties have not been increased.
  • The Biden administration has removed Xiaomi from the U.S. blacklist, which prohibits the U.S. from investing in Chinese firms with ties to the Chinese military. A recent federal court case has restricted such enforcement. Other federal cases had restricted earlier trade and investment measures against Chinese firms (TikTox).
  • President Biden has waived sanctions on the German firm overseeing Nord Stream 2, the Russian natural gas pipeline through the Baltic to Germany. 

It’s clear that Trump’s trade and tariff policies have been a huge failure. His signature effort, his Section 232 steel tariffs, were a debacle. He claimed that steel imports from the EU and Canada were a national security risk. Really? These tariffs have been estimated in costing U.S. consumers $900,000 for each job saved.

My conclusion is that President Biden has moved too slowly and this is somewhat surprising, although not completely. President Biden needs to come to grips with a broad range of trade and its related issues such as the protection of intellectual property rights, foreign investment and extraterritoriality of U.S. economic sanctions. The international system won’t reward past protectionism and unilateralism. While there are many other issues confronting the Biden administration, domestic and international, attention to trade and its related issues is also crucial. 


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Antitrust Reform — From the Gilded Age to the Digital Age — Way Overdue.

Amy Klobuchar’s ANTITRUST (2021) reviews and assesses antitrust law and regulations from the “Gilded Age” to today’s “Digital Age.”

She declares ‘trickle down economics of Reaganism along with the Chicago School’s ‘law and economics” approach (focusing on shareholder wealth creation) brought only lax antitrust enforcement. And directly led to grotesque corporate concentration and structural economic inequality. Her remedy is to resuscitate government regulation, adopt new legislation, and to counter aggressively conservative federal judges. Especially those most recently appointed by Trump. New rules need to be adopted for domestic and global transactions in this new digital era of domestic and global commerce. Focusing on large multinationals and Internet firms. I agree.

The following are really interesting and instructive passages from her book:

Nowhere do the modern-day competition issue come into deeper focus than with today’s Big Tech companies.

America’s laws have not been updated to track the changes in America’s monopoly landscape. Our Congress refuses to do it. Our enforcement tools are getting rusty. Our competition enforcers don’t have enough resources to effectively take on multibillion-dollar, much less trillion-dollar companies. And American courts are increasingly populated by conservative judges, including on the U.S. Supreme Court.

The remedy? Our antitrust laws — and our enforcers — need to be as sophisticated as today’s corporate titans, and we need judges who will interpret the antitrust laws in a reasonable fashion, from the U.S. Supreme Court on down.

… Extremely complex antitrust issues exist in the international arena.

… International deals pose unique regulatory and national security concerns.

… In addition to national security consideration, the evaluation of proposed international deals means that antitrust agencies in more than one country is involved.

… One particular and pressing global challenge America faces on competition is China.

… Discrimination against foreign companies is forbidden under World Trade Organization rules, but it is difficult to prove.

… The challenge, of course, is how to make America’s antitrust laws, already corrupted by Robert Bork’s ideological worldview relevant once more in an ever-changing business environment. There is — to put it mildly — a major disconnect between marketplace realities and the U.S. Supreme Court’s jurisprudence. 

… Reasonable regulations work in tandem with antitrust laws to protect against abuse of power.  It is now crystal clear that the antitrust laws must be seriously updated and made relevant again.

… A rigorous competition policy evens that playing field, spurs innovation, and reduces consumer prices.


In conclusion, this new Gilded Age 2.0 requires serious antitrust reform. U.S. corporate tax laws (as to tax havens and offshore corporations) need to be significantly reformed in this new digital era. But that’s another story.

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Biden’s Global Trade Updates — Taxes, Sanctions, Human Rights and Technology.

The following items are those I listed on my website  concerning President Biden’s recent trade actions. For the first 100 Days they amount to more than mere recalibration of Trump’s trade and tariff policies but not a grand reversal of those policies.

They posit starting a newer path in addressing systemic issues in the global system and the U.S. interface with the international system.

A bit more tougher on China, a bit slower in removing Trump’s Section 232 and Section 301 tariffs, good international tax proposals, more multilateral engagement, not much yet on the WTO, not much movement in joining newer regional arrangements, but more emphasis on human rights (and use of trade sanctions). Major focus on increasing U.S. competition with China (not confrontation) and developing policies to better engage in the global economy.


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Linkage Between Federal Trade Policy and Rural Economic Revival — Looking at Martinsville, Virginia.

The conclusion of a recent study concerning Biden’s trade proposals and state economic development  is really important. It looked at one rural region economy in Virginia. It concluded there is an important link between U.S. trade policy and state economic development. The bottom line is there is a federal need to support rural communities and workers. Do not try to coerce foreign countries. That does not work. But Biden’s “worker-centric” policy will not be enough to get trade on a better track. A bolder approach is needed.

Here is a summary of that study that appeared just recently:

Unsurprisingly, Americans have complicated views on trade. Although a majority of voters see free trade as a good thing, barely one-third believe that it creates jobs or lowers prices.

Part of what made the surge in Chinese exports so painful for American workers was that many of them lived and worked in industry towns. When manufacturing jobs in those towns disappeared in response to rising import competition, it wasn’t just factory workers who suffered: everyone else did, too. Consider Martinsville, a small town in southern Virginia that is part of a manufacturing belt that stretches through North Carolina and into northern Georgia, Alabama, and Mississippi.

The Biden administration should focus on the consequences of job losses rather than their causes.

When considering how to promote job creation in distressed regions, it is important to acknowledge that most of the U.S. jobs that were lost to import competition (or to automation) are not coming back. The China trade shock ended almost a decade ago.

The Biden administration should instead try to help communities such as Martinsville thrive. Doing so will require ingenuity and experimentation. Federal officials should give their local and state counterparts wide latitude to pursue policies that are right for the places they serve. Conventional approaches won’t necessarily be the most effective.

Take tax incentives, for example, which officials often use to entice businesses to move to their states or municipalities. Economist have found that although such measures expand output in targeted industries, they appear to do little to raise local living standards. And for each job they create, such incentives impose costs that are nearly ten times as high as those of some other options for creating employment, such as redeveloping defunct industrial sites known as brownfields.

So what actually works? Evidence shows that active labor-market programs, designed to help young and disadvantaged workers succeed in the labor market, are a good bet.

Helping left-behind regions should be a core goal of Biden’s administration. But trying to undo three decades of structural change in the global economy isn’t the right way to get there.

Biden and his team need to be clear-eyed about what trade policy can and cannot do to help workers hurt by globalization. The damage has been done, and free trade isn’t going anywhere. Protectionist measures and narrow attempts to placate labor unions will do little to help workers who are already hurting or to help others avoid a similar fate.

Better to help the unemployed get back on their feet.

“Trade Wars & Globalization (Proposals for Biden).” Foreign Affairs (Special Issue) (May / June 2021). See second article — “Can Trade Help Workers.”

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Biden’s Int’l Tax Proposals — Helps Global Trade, Not Just U.S.

International tax and trade are inter-related. Biden’s corporate tax reforms and proposals will impact global trade. That’s good. Addressing global trade issues is not the primary purpose of Biden’s tax proposals, which seem to be aimed at paying for his domestic agenda.

But they are, to an extent, intentionally designed to impact also international trade and commerce transactions. In part, to make sure that global corporations pay their fair share and don’t stay as free-riders while everyone else pays income tax. Global firms especially internet firms have billions of dollars offshore and avoid paying most income taxes to the United States and the countries where real economic activity takes place.

Global tax havens and offshore LLCs need to be restricted. Real economic activity should be subject to national taxation. Transfer transactions, phoney routing of transactions and ownership of assets including intellectual property rights need to be addressed.

We are dealing with multinational corporations and a nation-based tax system. Bilateral tax treaties are outdated.

A multi-jurisdictional world need to cooperate for the benefit of all. Working with the OECD and our trading partners is a start, long overdue. Tax avoidance and tax evasion is not pretty. It’s time for us to catch up with actual trading patterns and technological changes. The U.S. should take the lead — it would help us internationally and domestically.

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Global Taxation and President Biden — Recalibration, Long Overdue.

The following summarizes President Biden’s recent tax proposal made to the OECD.

The Biden administration is calling for the world’s biggest multinational companies to pay taxes to national governments based on their sales in each country, as part of an ambitious proposal for a global minimum tax. The plan would apply to the global profits of the very largest companies, including big US technology groups, regardless of their physical presence in a given country. Biden hopes the promise of a more stable international tax system will stop the proliferation of national digital taxes and break the mold of tax avoidance and profit-shifting.

The offer from Washington reflects Biden’s broader goal of ending what officials have described as a race to the bottom on global taxation that has deprived governments of revenue needed to fund basic services and investments.  The Trump administration had insisted on a “safe harbour” provision that would make compliance by US technology groups voluntary. Biden dropped that demand, but this week’s proposal offers a new solution. 

“Biden’s Global Tax Plan.” Financial Times (April 9, 2021).

Arcane regulations have long shaped the financial structure of international companies, which exploit legitimate loopholes to save on tax. So there will probably be a big impact from Biden’s proposal to eliminate US tax deductions claimed by those companies that make payments to related parties in low-tax jurisdictions. Biden’s proposals present a unique opportunity to reform an outdated, opaque and unfair system of global corporate taxation.

Biden’s Global Corporate Tax Plans. Financial Times (April 10, 2021).

The following is what I wrote during the 2016 presidential race. It’s about time that the United States confronts global taxation. Biden’s proposals are a good start.

 Malawer, “Global Taxation and U.S. Politics. Richmond Times-Dispatch (April 17, 2016).

Global tax avoidance is a blight on our tax system. Multinational corporations have an obligation to the communities where they do business and to the country that sustains them. U.S. multinationals benefit from U.S. laws and diplomacy. They need to act responsibly.

Global Tax Reform — Two Articles.” Foreign Affairs (2020).

While  the trade war between China and the United States has hogged headlines and driven market anxieties over the past year, an equally large threat to the global economy has gotten little attention: a looming tax war. Since the early twentieth century, countries have largely agreed on how to tax income earned by multinational corporations that conduct business across borders. But this long-standing regime is coming apart, imperiling the broader international economic order.

Under historic international tax rules, governments taxed the profits of multinationals based on where intellectual property was owned, where financial risk was borne, where the parent of a multinational corporation was headquartered, and where management, research, and development took place. Countries such as China and India have long advocated major changes to the international tax system to allow more taxation of profits in “market jurisdictions”—where the customers of a corporation’s goods and services reside.

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Biden’s Trade Policies — Less Drama, New Directions.

After two months, what can be said concerning President Biden’s trade policies?

First, let’s reflect on President Trump’s trade policies, which were confrontational and unilateral. He turbo-charged reliance on a national security rationale in imposing trade restrictions and tariffs on China and our allies.  

At the very outset of President Biden’s term, I thought he would turn away from the tariff drama of the last four years, but there would be no wholesale change in trade or tariff policies. That meant various tariffs would be kept in place, and the use of trade sanctions would continue not out of any sense of grievance, but out of realistic reliance on the United States’ real national interests. In other words, we would have a significant recalibration of trade policy. 

It also seemed to me that President Biden would focus on workers’ rights and human rights, both of which were causes adopted by prior democratic presidents. I also believed he would use the national security rationale much less as a phony rationale for Section 232 tariffs and that he would support a rebalancing of congressional authority concerning trade. (Congress, of course, has the exclusive authority to regulate trade and to delegate that authority.) This has already been supported by Virginia Senator Tim Kaine.

So far, President Biden has imposed sanctions on Saudi officials because of the Khashoggi episode, on Russian officials due to the Navalny saga, and on Chinese officials for the Uyghur abuses. He has retained restrictions on Hong Kong by not reinstating its special status. He has also retained national security tariffs on steel and Section 301 tariffs on Chinese imports to counter restrictive Chinese intellectual property policies. He recently imposed new export controls on Chinese technology firms for national security and foreign policy reasons. He has continued an investigation of European digital taxation under Section 301. But he has stayed sanctions on the EU over Airbus. Thus, President Biden is continuing some of Trump’s trade measures. However, he is using trade measures to put a welcome and renewed emphasis on human rights.  Under President Biden the United States has rejoined the UN Human Rights Council.

President Biden’s policy  supports a rules-based global system. He obviously intends to ensure that China conforms to those rules, regarding both trade and human rights. His lifting of sanctions on officials of the International Criminal Court, rejoining the World Health Organization (WHO), supporting the selection of a new Director-General of the World Trade Organization (WTO), and rejoining the Paris Climate Agreement and the Nuclear talks with Iran are already clear indications of a foreign policy focused on participating in multilateral institutions. They are not viewed as violating U.S. sovereignty. 

It remains to be seen if President Biden will have the United States join the revised Trans-Pacific Partnership (TPP) now reconstituted as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). A new member of the WTO Appellate Body still needs to be appointed. Further actions are being considered concerning global supply chains (semiconductor chips), foreign investment controls, and ‘Buy American’ legislation. Most importantly, President Biden needs to determine how to transition from Trump’s disastrous trade and tariff wars and specifically move from confrontation to better economic competition with China.

In the future, I believe President Biden will use Section 301 retaliatory measures much less. Instead, he will favor filing more cases with the WTO, particularly those concerning China and its IPR laws and practices. (The new USTR representative was previously a WTO litigator in the USTR office.) President Biden will also attempt to use diplomacy and multilateral efforts more often with a range of countries confronting the newest issues of global commerce. For example, there is already an indication that he will work with the OECD to address  digital taxation and taxation of multinationals’ export and foreign income. Tax avoidance and tax shelters are now at the heart of Biden’s economic agenda.  

Some of my more generalized conclusions are as follows:  Trade and tariffs will not be in the headlines on a daily basis. The complex inter-connectiveness of the global economy has been once again highlighted by the recent Suez Canal fiasco. President Biden will engage in the global economy and strengthen the United States’ position in it by recalibrating the nation’s policies. He believes in a rules-based global trading system where rules are negotiated and adjudicated. Most importantly, he knows his roots and believes in American greatness. The Biden administration’s focus will be domestic and threefold: rebuilding the U.S. economy, eradicating COVID-19, and strengthening democracy at home. 

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