Biden to Inherit Trump’s U.S.-China Trade War Upon Entering Office

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It’s been a tumultuous four years for U.S. commodity industries that found themselves a key focus of the White House through its aggressive trade policy agenda. From steel and aluminum tariffs to grain subsidies to boosting exports of liquefied natural gas, very few corners of the global commodities market eluded Donald Trump’s attention. There was at least one memo, executive order, pronouncement or tweet bringing some sort of attention to uranium, soybeans, and rare earths, the kinds of materials that haven’t received attention from American presidents in years. Now, with Joe Biden winning the election, how will the next U.S. president diverge from his predecessor, and where he might keep the status quo? Steel and Aluminum The biggest issues in steel and aluminum are very similar, given these two industries -- especially steel -- were a top priority for the Trump administration. Tariffs aren’t expected to go away any time soon under Biden, and market participants have adjusted for the 25% duty on steel imports and the 10% levy on aluminum. Removing them would be like catching a falling knife: It would alienate voters across the Midwest who helped Biden across the finish line. It would also lead U.S. Steel Corp. and Century Aluminum Co., among others, and the United Steelworkers union to lobby for some sort of new trade action to protect their industries. Biden is more likely to maintain the tariffs and work with key allies -- including the European Union, Japan and Canada -- to form a bloc opposing the subsidies China gives to its industries, which produce more than half of the world’s steel and aluminum. The Trump administration openly shunned multilateral trade partnerships, so this would be a big change in policy. It’s still unclear, though, what policies Biden would enact to further protect the industries, both of whom claim need more help. Trump administration officials criss-crossed Europe and Asia in 2019 touting U.S. LNG exports as “freedom gas” and “molecules of U.S. freedom,” but trade wars hurt sales as did environmental concerns over flaring in the Permian Basin and other emissions associated with production and shipment. Biden didn’t state a position about LNG on his campaign website but boasts a plan to reduce methane emissions and flaring, which European buyers would welcome. Biden was vice president when the Obama administration approved permits for all six of the current LNG export terminals. Political observers believe that Biden would bring the U.S. back into the Paris Agreement, an environmental treaty between nearly 200 nations to reduce greenhouse gas pollution. With buyers across the globe seeking greener or carbon-neutral LNG cargoes, the move might benefit U.S. exporters. “Our biggest concern is American LNG exports to Asia and to Europe, and how those have declined as a consequence of some of these trade wars,” said Mike Sommers, the president of the American Petroleum Institute. As a previous longtime member of the Senate Foreign Relations Committee, Biden “has a firm understanding of how important American energy independence is from a foreign policy perspective as well,” he said. Subscribe to our YouTube channel: https://bit.ly/2TwO8Gm Bloomberg Quicktake brings you live global news and original shows spanning business, technology, politics and culture. Make sense of the stories changing your business and your world. To watch complete coverage on Bloomberg Quicktake 24/7, visit http://www.bloomberg.com/qt/live, or watch on Apple TV, Roku, Samsung Smart TV, Fire TV and Android TV on the Bloomberg app. Connect with us on… YouTube: https://www.youtube.com/user/Bloomberg Breaking News on YouTube: https://www.youtube.com/c/BloombergQuickTakeNews Twitter: https://twitter.com/quicktake Facebook: https://www.facebook.com/quicktake Instagram: https://www.instagram.com/quicktake