Biden’s trade policy : A partial reset Biden’s trade policy : A partial reset Biden’s trade policy : A partial reset

Biden’s trade policy : A partial reset

Christopher Dembik

Head of Macroeconomic Research

Summary:  The Biden administration will be more moderate and mature on handling foreign affairs and will undoubtedly adopt a more multilateral approach on international trade issues, but a U-turn policy on China is very unlikely. The rhetoric will change, but the new administration will most probably pursue the same list of grievances against Beijing than its predecessor.

With a new administration now taking the reins, the question remains to know what will be the relationship between the United States and the rest of the world in the next four years. There is no denying that the perception of the United States has already changed in the international scene, and there is also no doubt that the United States will move away from the belligerent rhetoric that characterized the Trump administration. Trade policy will not be at the core of the US agenda in the first months of the new administration as its main priority will be to revive an economy slammed by the pandemic, but the issue of trade agreements and tariffs will be the second top issue that the president elect will need to deal with. We believe that the Biden administration will adopt a Jeffersonian stance in foreign policy (as was the case with the Obama administration), will favor a multilateral approach and will push for reconciliation with the Europeans. Biden’s trade policy will mostly aim at China, thus pursuing the same list of grievances than the Trump administration.

With all that in mind, here are our expectations regarding the evolution of the US trade policy under a Biden presidency, focusing on five main topics: the WTO and its appellate body, climate change and its integration into trade policy, tariff policy, trade relations with the EU and China.

-- WTO : Under the Trump administration, the WTO was by-passed, the United States did not comply with the rule of law in international trade, and unilateral actions were taken by Washington to defend its own trade interests. US concerns about the WTO and its efficiency to address trade dispute won’t disappear from one day to another, but a more conventional Biden administration is likely to try to reform the organization from inside, which would ultimately revitalize the WTO and its appellate body and ensure that trade flows as smoothly, predictably and freely as possible.

-- Climate change: With the United States expected to rejoin the Paris climate agreement in early 2021, climate change will be at the core of the US security and trade policy in the next four years. The president elect has already pledged to put further pressure on countries to adopt more ambitious targets, using if necessary American economic leverage (more probably resorting to development aid than tariffs for instance). It will be the first time ever that the three main superpowers (the United States, the EU and China) will be fully aligned regarding climate change, thus potentially leading to concrete achievements to fight against this global issue in the near future.

-- Tariff policy (in general terms): Biden’s trade policy will differ from Trump regarding tariffs. The Biden administration will probably refrain as much as possible from resorting to tariff threat and will adopt a more multilateral approach to promote its international trade agenda. With a very divided Congress, where Republicans are likely to keep control of the Senate, the new administration will have more limited room for maneuver in terms of trade policy. The Congress is inclined to take back its tariff authority and at least subject any “national security” measures to greater congressional oversight.

-- Section 232 tariffs on steel and aluminum : End artificial trade war with Europe, which means withdrawing aluminum and steel tariffs and removing the threat of auto tariffs. This is a necessary step to boost Transatlantic relations and create a united international front against China’s trade practices. During the campaign, Biden confirmed he would immediately consult with US allies before deciding on the future of US tariffs on Chinese goods in a bid for collective leverage against China. It will be an easy task to set up a coalition of countries that are not happy with China using loopholes in WTO rules to unfairly compete with foreign firms. In contrast with the Trump administration, the Biden administration understands the United States can advance its interests more effectively trough coalitions, using a multilateral framework, than unilateral initiatives and omnidirectional belligerence. Ultimately, this new approach could be much more challenging for Beijing.

-- China : Containing and confronting China is a strategic consensus between the two major political parties in the United States. Therefore, we don’t see Biden rolling back Trump’s tariffs on Chinese goods – tariffs and Phase One deal will remain in place, at least initially. Assuming China’s incomplete V-shaped recovery continues, the pace of Chinese purchases should further increase, which would be another good reason to keep the Phase One deal fully operational. On China, Biden is more or less aligned with Trump, meaning he will essentially pursue the same list of grievances than his predecessor. The main difference is that he will work in close coordination with the EU, Japan and Australia in this matter. We thus expect that China will be one of the main trade concerns in the next four years, with increased scrutiny on Chinese subsidies and non-market practices. The rhetoric will undoubtedly change but tensions will remain at very high level.


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

Saxo Markets
40 Bank Street, 26th floor
E14 5DA
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo Markets is a registered Trading Name of Saxo Capital Markets UK Ltd (‘SCML’). SCML is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo Markets assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992