“Buy American” is the iconic slogan of Biden’s $700 billion economic stimulus plan proposed in his campaign pledge on July 16. The “Build Back Better” vision to which this plan belongs also involves economic recovery, infrastructure, clean energy, racial equality, and the modernization of the medical system.
Unsurprisingly, the day after Biden’s economic plan was released, Trump couldn’t wait to attack it: “He copied me, and his plan could not be implemented at all.”
What are the highlights of Biden’s new economic plan? Is this plan the same as Trump’s “America First”? What impact will the plan have on Biden’s presidential campaign?
Biden’s solution highlights manufacturing and innovation
Biden’s “Buy American” economic plan is designed to counter Trump’s long campaign platform of “America First”. In Biden’s own words, American manufacturing is “an important part of today’s American prosperity.” His economic plan is responding to the demands of “revitalizing American manufacturing” and “innovation.” The core content of the plan is “ The highest level of government investment in procurement, infrastructure and research and development has been mobilized since World War II.”
Biden has always advertised his identity as a “middle class spokesperson”, and he publicly criticized Trump’s policy for protecting the wealthy “investor class” rather than the broad middle class and working class. This new economic stimulus package is also in line with Biden’s long-standing policy focus. It includes five major aspects, focusing on different aspects of American manufacturing and innovation, and is mainly aimed at protecting American small and medium-sized enterprises and improving the overall innovation capabilities of American enterprises.
First, “Buy in America”, Biden promised to truly implement this slogan. The US federal government will spend 400 billion US dollars in government procurement from 2021-2025, and the procurement objects are strictly limited to US products, materials and services. Biden believes that large companies and their special interests have caused a large amount of American taxpayers’ money to flow into the pockets of foreign companies. Therefore, Biden will adopt measures such as domestic content restrictions and prohibiting federal purchasers from arbitrarily exempting the “Buy American” clauses, etc., so that the products produced by small US companies can receive stable support at the demand level.
Second, “Made in America”, Biden declared that he would revitalize small and medium-sized manufacturing companies in the United States. In addition to the increased demand brought about by infrastructure construction, government procurement, and R&D investment, Biden will also use expanded credit lines, Manufacturing Extension Partnership and manufacturing special tax credits to enhance small and medium manufacturing The competitiveness of enterprises.
Third, “Innovation in the United States”, Biden plans to invest 300 billion US dollars in the next four years to support key industries. This will focus on supporting research and development in cutting-edge technology fields including advanced materials, medical and health, biotechnology, clean energy, aerospace technology, and artificial intelligence, and promote the United States to achieve global leadership in these key industries. Biden also deliberately mentioned China in the plan, believing that China is actively seeking to replace the United States in terms of research level and commercialization.
Fourth, “Workers win in the United States.” Biden plans to create a tax and foreign trade strategy that will benefit American workers. In order to prevent the middle class and working class in the United States from being affected by “foreign unfair practices”, Biden repeatedly mentioned China in this section. Many specific policy designs are based on China as an imaginary enemy. China’s policy is to ensure the unity within the traditional US allies system and to check the effectiveness of China’s policies.
Biden proposed to use measures such as the purchasing power of the federal government, changing the tax structure, and uniting allies to reduce dependence on competitors to gradually transfer the strategically valuable supply chain back to the United States.
Fifth, “The supply chain is in the United States.” Biden plans to promote the localization of key industries in the global industrial chain. The new crown epidemic has made the United States realize that some key commodities, such as medical equipment and drugs, need to be produced in the United States. Biden proposed using methods such as the purchasing power of the federal government, changing the tax structure, and uniting allies to reduce dependence on competitors to gradually transfer the strategically valuable supply chain back to the United States.
Biden and his team believe that this ambitious economic stimulus plan can restore the 5 million jobs lost in the epidemic and create another 5 million new jobs.
In general, Biden’s economic stimulus plan has a clear tendency to “economic nationalism”, that is, the government uses administrative power to protect its own enterprises or products. Such protection often hinders the development of free trade, and its essence is that political considerations overwhelm purely economic interests.
Plagiarizing Trump? Biden may be more “dangerous”
In terms of political goals, there is no essential difference between Biden’s economic plan and Trump’s trade protectionist policies. However, in terms of the level of detail, feasibility, and ways of achieving goals, the Democratic presidential candidate is different from the incumbent. The president’s plan is obviously different.
On the one hand, due to detailed implementation rules, Biden’s “Buy American” plan will be more likely to actually land. For example, Biden has formulated more specific requirements for the $400 billion government procurement category, responding to loopholes in government procurement and subsidies that have appeared before.
For example, the current US law allows the government to purchase some so-called “Made in the United States” products, but as long as the cost of domestic production in the United States exceeds 50% of the total cost, it is regarded as “Made in the United States” products. For another example, the current US law also allows products that receive government subsidies during the research and development stage and are later assembled and produced overseas to be labeled “Made in the United States”. In its economic plan, Biden has relevant rectification measures for these loopholes.
On the other hand, Trump, his characteristic is that he made promises relatively quickly, but the implementation of the promises was sloppy. In the first week of his official presidency, Trump signed a memorandum requiring the use of American-made steel for natural gas and oil projects, but until today, he has not taken any substantive actions to advance the memorandum. The chairman of the American Manufacturing Alliance, Scott Paul, also criticized this: “Since Trump took office, there has been no increase in domestic purchases (American-made steel).” Biden’s issue of government procurement is obvious. It is more precise than Trump and directs to the core of the problem.
On the other hand, although both Biden and Trump emphasize the protection of domestic manufacturing and the protection of the interests of the working class, they have different views on how to achieve this goal. As a veteran politician with 41 years of political career, Biden agrees more with the value of the existing international system. This means that Biden still believes in international norms and multilateral cooperation mechanisms to a large extent, and believes in the importance of the traditional alliance system in the face of external threats. Therefore, Biden’s economic plan also largely reflects the willingness to “return the United States to the leadership of the Western alliance system.”
Specifically, in this plan, Biden mentioned the cooperation between the United States and its allies three times, covering aspects such as reforming existing international trade rules, coordinating with allies to control China, and reducing reliance on strategic commodities from competing countries. These policies are significantly different from Trump’s emphasis on bilateral exchanges and the frequent destruction of allies. Therefore, it is foreseeable that if Biden is elected president, he will try to bridge the gap within the Western alliance.
We can also analyze the basic policy orientation of the former US vice president from Biden’s previous views on some multilateral economic organizations. In 1994, Biden, who was still a senator, supported the signing of the North American Free Trade Agreement (NAFTA). During the Obama administration’s term as Vice President, Biden was also an active advocate of the Trans-Pacific Partnership (TPP). Biden’s preference for multilateral economic organizations indicates that he will adopt a foreign trade policy that is fundamentally different from Trump’s unilateralism, and a multilateral trade arrangement including the United Kingdom and the United States may emerge.
Biden’s economic plan basically signifies that no matter who is the next president of the United States, there will be no major changes to the overall protectionist economic policy of the United States. What makes Biden more “dangerous” is that he is not only more organized and meticulous in formulating policies, but also knows better than Trump to use the various resources accumulated by the United States after the Cold War because of its dominance, such as in international trade. Mechanism and the right to speak in the traditional ally system.
If Biden succeeds in being elected president, he may be an American president who has gone further than Trump on the road of economic nationalism.
Biden’s “New Deal” is a fatal blow to Trump?
One of the reasons for Trump’s 2016 election victory was that he won a key swing state in the “Rust Belt” region of the United States. As economic globalization promotes the transfer of most of the US industrial chain to foreign countries, working class groups in these states have been greatly impacted by unemployment and the decline in quality of life. Trump used the sentiments of these voters to implement the “America First” policy and successfully won the support of industrial blue-collar workers.
Biden’s new economic stimulus plan intends to replicate the secret of Trump’s victory in 2016. In fact, the place where Biden announced his new economic plan is Pennsylvania in the “Rust Belt” area. The state also played a key role in the 2016 election. Trump was the first Republican candidate to win this state since 1988. The role of Pennsylvania in the U.S. election is self-evident.
In addition to supporting the “disinvestment police” campaign, Biden promised that children from families with an income of less than US$120,000 will go to college for free. He also said that after he was elected, he would increase housing for low-income people and subsidize the construction of high-density buildings in suburban or affluent areas.
The timing of Biden’s announcement of this policy is also quite favorable for him. At present, the secondary epidemic situation in the United States is on the rise. Southern states including Florida, Arizona, and Texas have become the new epicenters. This will undoubtedly strengthen the impression that Trump’s ineffectiveness in fighting the epidemic is in the hearts of the people in these states. Biden’s timely announcement of a series of economic policies may also hope to attract some voters who are dissatisfied with the Trump administration’s inability to effectively control the epidemic.
As mentioned above, Biden’s plan is not only precise and can give voters sufficiently clear expectations, but also promises a government budget of up to 700 billion U.S. dollars. This will also cause some voters who are dissatisfied with Trump’s vague policies to switch to the Biden camp. .
Regarding the racial equality policy, in addition to supporting the “divestment of the police” campaign, Biden promised that children from families with an income of less than US$120,000 would go to college free of charge. High-density buildings and plant them in good school districts of upper middle class. In addition to the possibility of choosing an African-American woman as the vice presidential candidate, Biden also promised to choose an African-American woman as his first Supreme Court candidate.
Of course, it remains to be seen whether Biden’s economic plan can really attract middle-class and working-class voters in the Rust Belt. And until June, most polls also showed that the American people generally believed that Trump was better than Biden in managing economic activities. However, a recent poll published by the “New York Times” showed that Biden’s approval rate on economic issues surpassed Trump for the first time. Biden also needs to continue to work hard on economic issues to preserve his advantage over Trump on other issues.
Faced with the increasingly fierce confrontation on economic issues, Trump did not give up. He has always criticized Joe Biden for being coerced by the ultra-left, which will greatly increase taxes, amnesty illegal immigration, and make the United States completely unrecognizable. Trump also claimed that he withdrew the United States from the “Paris Climate Agreement” that killed job opportunities and saved thousands of American jobs. Once Biden is elected, the United States may join the “Paris Climate Agreement” again. , Has a serious impact on US companies and the US economy; he also attacked Biden for helping China obtain most-favored-nation status in the WTO, and when he was vice president, he also stood by when millions of jobs were outsourced to China.
Biden’s new economic plan seems to have a considerable degree of consistency with Trump’s policy agenda, but there are still considerable differences in policy strength and implementation methods. For China, Biden is easier to predict than Trump, but the former vice president may take more powerful and systematic measures to “control China”, including coalitioning allies and using existing international mechanisms. Biden himself has repeatedly expressed his desire to be “tougher” towards China. We must also be more prepared about this and carefully observe the series of policies Biden recently released to identify his true intentions.
