Under the Trump Administration, the United States beat a continuous retreat from global affairs. After winning the election, President Joe Biden exhorted to allies that “America is back.” After four months, it’s time to peek under the curtains to see how that has gone so far. Unfortunately, the President’s actions have not lived up to his words. Refusal to reopen trade because Trump made protectionism popular is, frankly, not a good look. We are expanding punitive sanctions, even against allies. A “buy American” executive order added costs to every government order. An archaic law called the Jones Act is being vigorously upheld as a model despite the fact that the Jones Act is directly responsible for making American goods less competitive (more on that later). Immigration and refugee programs, rather than being expanded upon as Biden promised on the campaign trail, have continued to languish. We have continued to withdraw from the global stage.
Trade, which expanded more or less continuously since World War II, now seems to be championed by no one. You may think that we are only whacking China with heightening tariffs. That is far from true. The European Union and the United States are in an escalating trade war as well. Steel in particular is being protected from foreign competitors. For what it’s worth, this practice raises steel prices for American manufacturing and makes our higher-value products less competitive abroad, but that’s not the point. The data are conclusive: specialization created by globalization allows greater consumer choice at lower prices.
To be fair, this has created some losers. There are swaths of American geography that were formerly hubs of economic activity but have been largely abandoned to create ghost towns and poverty. The solution to this problem is not cheap. The only countries that have successfully dealt with it have invested two to four percent of their GDP into retraining. The US has not cracked one-half of one percent. It’s a harder thing to tackle than blame on other countries, but solving it requires being more open, not more closed. Perhaps, instead of plowing hundreds of billions more into elder care, we could spend that on retraining workers. It’d raise long-term tax revenue and reduce the cost of supporting those left behind in the long run. Finger-pointing is just too easy, especially when the other side did it first.
Biden has explicitly prioritized jobs over consumers with his “buy American” orders and with his trade policy. It’s easy to point at the 2,000 jobs you saved at a steel plant by making steel more expensive. It’s hard to explain the savings each consumer gets from cheaper steel or the savings manufacturers get, making them more competitive both at home and abroad, and in turn allowing them to hire more people. Each of the jobs ‘saved’ may cost consumers $1 million per year. Sometimes it’s more. The problem is that large groups of consumers don’t get together to protest the extra few bucks they have to spend on things because of irresponsible trade policy, but 2,000 people who lost their jobs because the company they work at is not globally competitive just might.
This brings me to the Jones Act. The Jones Act requires American-made ships to transport goods from American destinations to other American destinations. There are no American shipbuilders of high-quality containerships. As a result, shipping something from, for example, Florida to Maine can only be done overland, which makes it so expensive that, in many cases, it’s cheaper to ship something from China. NPR’s Planet Money explained it pretty well; if you’re interested in learning more, check it out. It’s only 16 minutes. The Jones Act has been largely ignored by politicians, but President Biden has vocally embraced the preposterous law.
If we, as Americans, want to be competitive on the global stage, we must grow our population. I have written about this multiple times, so I won’t go further into it now, but immigration is a key piece of that puzzle. Despite campaigning on expanding immigration, Biden has been loathe to execute for what I have to assume is fear of upsetting the right. It was only after being prodded by supporters ranging from center to far-left that Biden finally expanded the refugee cap from abysmally low Trump levels to 66,000 per year with 125,000 to come down the road. Employers are still finding it extraordinarily difficult to sponsor immigrants on work visas. College and PhD graduates are having no more ease staying here after they finish school than they did under Trump. The status quo is unacceptable. We can only hope that President Biden wakes up to the need for change on this front sooner rather than later. This should be a higher priority.
At the end of the day, we are still only four months in to the Biden Administration and he has had COVID on his plate for the entirety of that time. It’s possible that he will improve. He has not, however, given any indication that foreign policy or trade policy will improve beyond less inflammatory language (which, to be fair, is certainly important, even if it is an incredibly low bar). Judged on his performance in this area alone, Biden has outperformed only in comparison to the dumpster fire that was Trump. America deserves better and the world needs more to defend against the incursions of autocracy.