Whether It’s Donald Trump or Joe Biden, It Is and Always Will Be “America First”
America's historic allies must open their eyes to this reality.
The election of Joe Biden as President of the United States in place of Donald Trump had raised great hopes in the Western world. America's historical allies, who had been largely abused by Donald Trump for four years, were hoping that American trade policy would be softer under Joe Biden.
They got what they paid for. This is the assessment that can be made after nearly a year of Joe Biden in the White House.
Between Donald Trump and Joe Biden, only the style has changed. It is much more polished under Joe Biden. That's for sure. However, Canada and Mexico can testify that, in reality, “America First” continues to prevail. America's two neighbors have once again fallen victim to the protectionist impulses of their larger neighbor.
The latest episode concerns subsidies for electric cars.
The latest “America First” episode comes from Joe Biden and concerns electric cars
In the gigantic investment program of 1.7 billion dollars, already voted by the House of Representatives but not by the Senate, large subsidies for the purchase of bicycles or electric cars are planned. In the latter case, the subsidy can reach 12,500 dollars per vehicle.
This spectacular assistance is not for everyone. In addition to the basic $7,500, there is an additional $4,500 if the car is produced in the United States and another $500 if the battery itself is “Made in USA”. Mary Ng, Canada's trade minister, got out her calculator and said that this amounts to taxing a car produced in Canada and sold in the US at 34%.
Under these conditions, it was not worth signing, in 2018, under the Trump administration, a new free trade agreement, effective in 2020.
Moreover, as if to distance itself from the previous administration and satisfy its left-wing, the Biden plan includes an even more astonishing clause. It restricts the $4,500 “Made in USA” subsidy to cars produced by unionized workers. This restriction de facto excludes foreign cars, German, Japanese, or South Korean, all of which are manufactured in southern states without unions: Virginia, Alabama...
For decades, these conservative regions have welcomed foreign manufacturers by leaving the nasty unions that make cars so expensive to make in Michigan, the historic headquarters of Ford and General Motors, at the door. Immediately, Toyota, BMW, and Mercedes protested against this novelty that would reduce their competitiveness.
It is clear that “America First” is and will remain the guiding principle of American presidents no matter what happens
The administration led by Joe Biden responded that it is normal for American taxpayers' money to finance American factories and that favoring unions is to help rebuild the middle-class dear to the American president. This sudden activism reminds us that the return of American protectionism is now a bipartisan reality. As for the sophisticated architecture of this subsidy, by trying to please everyone, right and left, it is likely to please no one.
Western countries are coming back to earth by realizing once again that whoever is president of America, it is, and always will be, “America First”. If Donald Trump's aggressive approach left no room for ambiguity, Joe Biden's more polished approach may have left some doubt for a while.
But after a year of Biden's presidency, doubt is clearly no longer allowed. It is up to Western countries to draw the necessary conclusions.
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