Leibowitz: The Biden Administration’s New Trade Policy

National Security Advisor Jake Sullivan recently gave an important speech on the direction of trade policy. It was not his speech alone, but part of a coordinated roll-out of the Biden administration on trade policy, including contributions from President Biden, US Trade Representative Katherine Tai, and US Treasury Secretary Janet Yellen.

It’s worth looking at the Sullivan speech in detail. It signaled that the administration is willing and eager to increase the role of government in international commerce. In this the Biden team shares the outlook of the previous administration. As we’ve seen before, the international trade restrictions of the Trump administration (steel, aluminum, China) have largely been retained by the Biden team. And, perhaps more important, the role of government in international commerce is reaching more sectors because of the role of vital industries (green energy, semiconductors) in the nation’s security. Both carrots (subsidies) and sticks (trade restrictions) are being used and government is trying to move industries back to the US.