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US Election 2020 The Navigator Press

Outlook on the Next US Presidency 


Analysis by Frank Samolis, AmCham Germany Senior Advisor, Washington, DC

As of today, it is still unclear who will win the Presidential election between President Trump and former Vice President Biden. Many important states have still to finalize their results including Michigan, Pennsylvania, North Carolina and Georgia. I will follow up with an updated memo once the end results are clear, but for the time being, there are a lot trade policy issues that are ongoing and will continue to be in play before inauguration day on January 20, 2021.

 

The issues are as follow:

US-UK Talks: The fifth round of talks on a Free Trade Agreement (FTA) between the United States and the United Kingdom just concluded and it is believed that negotiations will resume in the next couple of weeks. While the UK remains optimistic about reaching a comprehensive agreement the most difficult issues are yet to be resolved and it is unclear whether an agreement can be reached before the expiration of Trade Promotion Authority (TPA), which expires at the end of June 2021. Under US law, the President is required to notify the US Congress 90 days prior to submitting the agreement which would be April 30, 2021. Therefore, time is short and wrapping up the FTA agreement but it is still certainly possible.

WTO Dispute between Boeing and Airbus. In the ongoing WTO dispute between Boeing and Airbus, the next step is up to the EU, which won the right at the WTO to impose retaliatory tariffs on nearly four billion dollars worth of US goods. USTR has argued that the EU does not have the right to impose the duty’s because the Washington State legislature recently eliminated the tax break that was the subject of the WTO dispute. Therefore USTR warn that the US could strike back if the EU retaliates on ruling. USTR has already imposed tariffs on an estimated 7.5 billion dollars worth of EU good.

US-Kenya FTA Talks: United States and Kenya are now convening their second round of negotiations on a Free Trade Agreement which began on October 21st and will end on November 12th. It is expected that several rounds of negotiations will be need in order to meet the TPA deadline discussed about with respect to the US-UK FTA.

US France Dispute: The US government may also impose tariffs on an estimated 1.3 billion worth of merchandise from France, if France does go ahead in January 2021 and collecting a digital services tax that US alleges unfairly targets large US tech companies.

WTO Director General Contest. The race for the next Director General of the WTO came down to a contest between former Nigerian Finance Minister Ngozi Okonjo-Iweala and South Korean Trade Ministry Yoo Myung-Hee. The United States has objected to the selection of the Nigerian candidate, which has thrown discussions into great confusion. It is expected that WTO members will raise the issue again at the General Council meeting on Monday, November 9th.

US-Brazil ethanol and sugar talks. Brazil recently extended the duty free quota for the United States to ship ethanol to Brazil for ninety days to allow time to negotiate a market access agreement covering both US ethanol and Brazilian sugar. The deadline expires in mid December, and if no deal is reached, US ethanol exports to Brazil could face a twenty percent tariff.

Pending trade preference programs. The US Generalized System of Preferences (GSP) and the Miscellaneous Tariff Bill both expire on December 31, 2020 unless Congress votes to renew those programs before that date.

China: Of course US-China relations will be greatly affected by the results of the US Presidential election. Should President Trump be reelected, it is expected that there will be momentum to enter into phase 2 of the US China trade negotiations, while keeping the Section 301 retaliatory tariffs in place. If Mr. Biden is elected, there is no clear indication whether he will maintain the existing Section 301 Tariffs and it is expected that he will create a more structured mechanism such as the Strategic and Economic Dialogue (SED) under the Obama Administration, to serve as a mechanism for future bilateral negotiations.

Tariffs on Steel and Aluminum: It is also unclear what will happen with the existing tariffs imposed pursuant to Section 232 of the Trade Expansion Act of 1962 on steel and aluminum products. Presumably, if reelected President Trump would keeps these tariffs in place, while it is unclear whether a President Biden would revisit the existence of these tariffs and seek to eliminate them.

Finally, as with the US Presidential election it remains unclear which party will control the United States Senate. This will obviously have a major impact on the Trade Policy Initiatives of either President Trump or a President Biden, and a future analysis will discuss the outcome in greater detail.

 

Click here to find out more about the next US presidency from a European perspective by Markus Russ, Senior Advisor AmCham Germany in Brussels. 

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