U.S. Election Impact
Despite ongoing challenges from the Trump Administration, it looks like the United States is likely to have new leadership come January 2021.
Below are a few relevant articles discussing what that could mean for trade, manufacturing, and the U.S. sewn products industry, followed by a brief analysis from the SPESA team.
Biden’s Domestic Focus
Political analysts anticipate President-elect Biden’s main focus for the beginning of his administration will be dealing with the impact of Covid-19 and economic recovery for the country. His economic policies will include initiatives to create jobs, partially through boosting domestic manufacturing. During the campaign, Biden proposed a $700 billion plan to bolster the U.S. economy, and called for “Buy American” legislation. The plan included $400 billion dedicated to buying U.S. products and services in hopes to spur growth and reinvigorate the manufacturing sector.
However, Biden’s policies will undoubtedly be less “America-first” than those of President Trump. The U.S. can be expected to devote more time to international diplomacy and multilateral cooperation. Think more carrot, less stick.
Trade won’t be at the top of the agenda, but we should still talk about it.
First off, Biden is not expected to reverse any of Trump’s trade restrictions any time soon. For example, don’t expect a reversal of the Section 301 tariffs on Chinese products imposed by the Trump Administration. That being said, under Biden’s Administration, we might see some easing in certain areas and on certain products, as well as an exclusion process re-opened. (This was a topic of conversation during the SPESA Virtual Executive Conference.) Pundits argue the U.S.-China relationship will be Biden’s greatest foreign policy challenge.
One new factor at play is the newly-signed Regional Comprehensive Economic Partnership (RCEP), the world’s largest trade agreement to date. The agreement is regarded as a China-backed alternative to the Trans-Pacific Partnership (TPP), which excluded China, and of which the U.S. pulled out in 2017. The new agreement could put pressure on the Biden Administration to strengthen ties in the Asia-pacific region and/or reevaluate U.S. participation in large-scope multilateral agreements.
The U.S. will also likely continue ongoing trade talks with the United Kingdom and Kenya.
The U.S Congress will look largely unchanged moving into its next session in January. Despite a few seats flipped in both the Senate and the House of Representatives, chamber control has not changed as a result of the recent election.
During the lame duck session — the short window of time between a November election and the start of a new session — Congress will likely debate over new stimulus packages, as well as any legislation set to expire at year’s end such as the Generalized System of Preferences (GSP).
Things to Watch
This obviously has not been a smooth election or transition, and we expect to see continued protests, recounts, and legal battles in the coming weeks. Right now, there are two things on SPESA’s radar that readers might want to keep an eye on as well.
First, there is a theory that Trump may vent his frustration with China — and possibly with the election — through new tariffs. We will continue to monitor for any movement in this area, as well as a response from the U.S. government to industry requests for an extension of the Section 301 tariff exclusions that are slated to expire December 31st. (Read more in this month’s trade & policy round-up.)
Second, there were a few reports of a possible trucker strike in response to the election results and as a protest against Biden’s proposed environmental policies. But rumors of the strike are mostly contained to social media and seem to have lost momentum.