With less than a month to go, the US presidential election is rapidly closing in. Vice President Kamala Harris and Donald Trump are both pitching domestic audiences hard on their merits and prospects for the coming presidential mandate.
As Europeans, we remain observers, yet the outcome of this election, no matter who prevails, will deeply influence the next four years. EU politicians and officials remember with dread the tumultuous first Trump administration where much of the trans-Atlantic partnership was dismantled. Could we be heading for a repeat?
What can we realistically expect from the next administration on the topics that will matter most to us, like trade and economic policy?
Neither candidate has been specific in their plans coming into the final stretch of the election, but some points of interest stick out.
There are reasons to believe that Harris will stick close to her predecessor on economic policy. One of her standout policy proposals, the "America Forward" tax credit, carries a striking resemblance to President Joe Bidens Inflation Reduction Act. With credits for clean and strategic tech manufacturing, it is a sign of continuation rather than rupture.
Where there is more doubt about the Harris agenda, is on antitrust policy. Under Biden, Federal Trade Commission Commissioner Lina Khan has been on the offensive against Big Tech and large corporations abusing their market power. Wall Street and Silicon Valley donors have been pushing for Harris to force Khan out, opting for a less confrontational commissioner. Some reporting suggests Harris may be listening.
On trade policy, it’s all about China. As a White House official told the author of the recent book The Internationalists on Bidens foreign policy, it’s all about “Russia, Russia, Russia, and China, China, China.” This will remain true of Harris as well.
One of her closest advisors, Philip Gordon, has previously argued for a multilateral strategy, emphasizing the importance of building alliances with countries like Australia, Japan, and the EU to collectively pressure China into adhering to fair trade norms. This would suit the EU which has felt a lack of US interest in the continent, outside of the war in Ukraine, under the Biden administration.
Competition with China is expected to drive much of Harris’s approach to economic policy and trade. When Biden took office, he embraced several elements of Trump’s China strategy. Harris is likely to continue along this path, reinforcing the bipartisan stance of hostility toward China that has now become standard in the US political class.
The same will certainly be true of a second Trump administration. US-China trade deficits and tariffs has been on Trump’s mind during the campaign, with the Republican candidate advocating for a flat 60% tariff on all Chinese imports.
Trump’s policy platform is light on details but forceful in rhetoric. It argues for a broad reshoring of critical supply chains and curbing of China’s ability to trade freely. It seeks to abolish the country’s Most Favored Nation status, which would raise the tariffs it will face across the board.
In No Trade Is Free, Robert Lighthizer, who is likely to take an important cabinet position in a second Trump administration, details what a Trump trade policy would be, under his tutelage. He argues for a continued push for manufacturing capacity in the US paired with a hawkish trade policy, claiming Biden effectively copied Trump’s industrial and trade policy.
Lighthizer supports tough tariffs to root out what he views as currency manipulation by trade partners. He is, as Trump is, obsessively determined to lower the US foreign trade deficit. Whether one agrees with his emphasis on the deficit’s importance or not, it is likely to shape the Trump administration’s approach to trade partners. Needless to say, the EU has a significant trade surplus vis-à-vis the US of its own.
Similarly, Robert O’Brien, a former Trump National Security Advisor, has argued that now is the time to push hard on China. Exorbitant tariffs are a given, as well as “tougher export controls on any technology that might be of use to China.”
Both the democrat and republican option puts the EU in a pinch. Should it refuse to take part in the increasingly adversarial push on China, it risks getting in the White House’s cross hairs itself. At the same time, full US attention in the east, leaves room for a strengthening of the trans-Atlantic partnership.
This vision of the future leaves the EU with several pressing questions: Will it follow the Americans into a trade war with China, and can it provide a united internal front? What domestic costs will the EU incur as a bystander to the inevitable clashes between China and the US?
This op-ed was originally published in the EUobserver
Ian Hernandez is a Programme Assistant in the Europe's Political Economy Programme at the EPC.
Varg Lukas Folkman is a Policy Analyst in Europe’s Political Economy programme.
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