Trade

Biden Starts Unwinding Trump’s Trade War

Written by SK Ashby

Trump started a trade war with Europe in response to a 16-year old dispute dating back to the George W. Bush administration that concerned subsidies for European aerospace giant Airbus.

Previous administrations did not escalate to the point of starting a trade war over the matter because no one wins a trade war. It's just not worth it.

To that end, the Biden administration has just suspended some of the tariffs related to the dispute.

LONDON/WASHINGTON (Reuters) - The United States agreed a four-month suspension of retaliatory tariffs imposed on British goods such as Scotch whisky over a long-running aircraft subsidy row, with both sides pledging to use the time to resolve the dispute. [...]

“The United Kingdom and the United States are undertaking a four-month tariff suspension to ease the burden on industry and take a bold, joint step towards resolving the longest running disputes at the World Trade Organization,” a joint statement said.

For the moment, this only applies to British goods, but there's no reason to think this isn't just the beginning of a wider rollback.

Unwinding the trade war with China will take longer if not years, but I expect it's only a matter of months before the Biden administration reaches an agreement with the rest of Europe. The European Union has also imposed tariffs on American goods in response to our own subsidies for Boeing that also date back to the same period of time under the Bush administration. It would make the most sense if both sides suspended their tariffs at the same time. Foreign policy is still petty even when adults are in charge.

If world leaders really want to see their economies booming when the coronavirus pandemic is over, there's no better time to end a trade war that is costing both sides money with no tangible benefit or reward for it.