Trump, Biden and ‘Made in USA’: Same Refrain, Varying Notes

In July, former Vice President Joseph R. Biden Jr. presented an economic strategy to “rebuild domestic manufacturing capacity,” restoring local supply chains from semiconductors to pharmaceuticals. In September he added a tax penalty to the plan, aimed at companies that move jobs to other countries, alongside a tax credit for businesses that bring them home.

The proposals might have seemed like something from President Trump’s playbook.

“There is a common concern, which the Trump candidacy forced a lot of people to think harder about,” said Jared Bernstein, a former top economic adviser to Mr. Biden who is informally advising his presidential campaign. And that is “the extent to which globalization has left significant swaths of people in many different communities behind.”

These common understandings could reshape the global economy. No matter who wins in November, economic policy for the next several years will aim to protect American employment from outsourcing driven by employers seeking lower labor costs, and to reclaim a foothold in industries that the United States had given up for lost.

“If the argument is that we need high-paying manufacturing jobs, because they fit the skill set of a lot of people that are being left out, that is an argument for deglobalization,” said Derek Scissors, an economist at the American Enterprise Institute, a conservative think tank in Washington. “We would have to have some deglobalization for this to work.”

Depending on how the next administration deploys the tools of government to serve this cause, the United States could reconfigure the global network of corporate supply chains that multinational corporations have established over the last four decades. A “flat world” with countries ever more closely tied together through trade and investment, pursued by presidents from Ronald Reagan to Barack Obama, seems to be an outdated goal.

A Biden administration is unlikely to continue to impose tariffs on friends and foes alike, deploying protectionist tools in a more strategic and disciplined way. Still, policy proposals suggest that Mr. Biden would stick to the goal of encouraging, steering, cajoling or pushing American companies to develop critical industries and the jobs they support in the United States.

“Biden is not blindly pro-trade, but he doesn’t want to shrink from the world like President Trump has,” said Ben Harris, a senior economic adviser to Mr. Biden and his campaign. “What the vice president proposes is a new approach to globalization, one in which we don’t get behind every trade deal on the grounds that more trade is always better.”

Mr. Trump has put tariffs on imports from rivals and allies, started a trade war with China and blocked the access of Chinese companies to American technology. He renegotiated the North American Free Trade Agreement, short-circuited the World Trade Organization’s dispute settlement system and pulled the United States out of the Trans-Pacific Partnership.

But a membership survey published in September by the American Chamber of Commerce in Shanghai found that despite the administration’s push for American companies to redirect investment to the United States, only 4 percent planned to do so; 79 percent reported no change in plans.

Whatever turn American protectionism takes, it will remain squarely focused on China. “Trump did wake us up on the China issue,” added Rob Atkinson, who heads the Information Technology and Innovation Foundation, a think tank close to the U.S. technology industry. “He made it clear that we have to get tough with China.”

At the same time, the American policy objective is increasingly shifting from jobs to broader national security considerations including technological primacy and the protection of intellectual property.

“This is a much more complicated discussion than how much do we import and how much do we export,” said David Autor, an economist at the Massachusetts Institute of Technology who is not advising a presidential campaign.

Republicans and Democrats alike are intent on preventing China from becoming the dominant supplier of advanced communications technology and ensuring that the United States develops new energy technology, advanced semiconductors and pharmaceuticals.

The effect may be to further slow a globalization process that was already losing momentum as companies reconsidered the far-flung supply chains they deployed in the decades after the end of the Cold War.

American corporations may not be flocking home as a result of the Trump administration’s tariffs, but globalization has shifted into a lower gear since the 1990s and early 2000s, when American businesses flocked to China and other cheap labor markets. Trade growth eased after the financial crisis of 2008, as China and other Asian economies rose up the technological ladder to make more of the sophisticated parts and components they used to import and assemble into finished goods for export. Investment flows across borders also retrenched.

It will be difficult for the United States to disengage from China, which remains a huge market for American companies.

Yet the relationship could take a turn for the worse. Mr. Autor, for one, thinks that the new politics of trade and investment is splitting the world into a Chinese bloc and a Western bloc, led by the United States. “It will be a bipolar world, bifurcated, with different standards and different rights,” he said. Where the jobs end up will be a secondary consideration.

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