But what is certain is that the tone in Washington has begun to change. Even without Republican support, using only executive action and procedures available to pass budget legislation in the Senate by simple majority, under Biden, economic and social policy in Washington is already on the way to a big transformation.
A different interpretation of "America First"
In a 180 degree turn from the direction set by his predecessor, Biden’s foreign policy will aim to reforge strong ties with the industrial democracies and to use multilateral institutions as a point of leverage to reestablish American leadership.
His executive orders in this space send a strong signal that the United States is again willing to work with other countries on the most pressing global issues. The decision to rejoin the Paris Climate agreement, the World Health Organization, and the Covax vaccine alliance are among the most important of these. Collaboration is also signaled by the decision to stop funding the border wall with Mexico, to absorb larger numbers of refugees, and to end a travel ban which affects mainly Muslim countries.
However, Biden has given mixed signals on the crucial issue of trade. Though he has been critical of Trump’s tariffs, his team, which includes little known US Trade Representative-designate Katherine Tai, have spoken of a worker-driven, not investor-driven trade policy. This is code for a trade policy that insists on tough enforceable labor standards rather than one that opens America’s markets and provides access and protection for American investors abroad. Biden himself has emphasized that new trade deals, such as a Free Trade Agreement with the United Kingdom or rejoining the revamped Trade Pacific Partnership are not a priority. His "Buy American" executive order and the absence of any indication of when and whether tariffs on steel and other products from allies will be removed add to the concerns of America’s trading partners.
Still, even though trade is low on the priority list, it is difficult to imagine Biden pursuing Trump’s rogue policies at the WTO. The United States’ decision to support my former World Bank colleague Ngozi Okonjo-Iweala, the first African and the first woman as Director General of the organization, is an important first positive sign. Even though Biden’s is unlikely to be an enthusiastically globalist administration, I expect that it will support predictability in trade relations, and that a negotiated phase-out of Trump’s tariffs occurs over the next year or two. At a time when China, Europe and Japan are busy negotiating trade and investment deals on all fronts, the United States cannot afford to stay still for much longer. Yellen and Powell are likely to be powerful voices in support of the Bretton Woods Institutions, the IMF, and the World Bank, both of which view openness to trade and foreign investment as central to sustained economic growth.