No Waves Created in U.S. Foreign and Trade Policy

Foreign policy was not a determining factor in the U.S. midterm elections. The outcome is unlikely to shift the international priorities of the Biden administration as it confronts a fractured geopolitical landscape in 2023.

By Jim Meszaros

In fact, that’s the stark reality President Biden faces at the United Nations climate summit in Egypt, where developing nations are criticizing the United States and other industrialized nations for causing climate change and demanding they provide funding to address it.

The Biden administration’s global climate diplomacy will continue, but new funding from Congress for developing markets to make the transition to clean energy will be difficult to secure.

There is broad bipartisan support for the United States engaging with China as both a military and economic competitor and this will likely continue in a divided Congress. The Biden administration has kept Trump-era tariffs in place and expanded the use of export controls to cut off China’s access to U.S. technologies in semiconductors and other sectors. Additional restrictions could be announced in the weeks ahead. The Biden administration will continue to work with allies to get their buy in.

Republicans may prioritize other issues, such as urging the administration to push China to meet past commitments to import more U.S. farm and manufacturing goods. Republican Leader Kevin McCarthy has said he plans to create a task force to examine the full extent of the U.S. relationship and rivalry with China. Republicans may try to act against China-sourced chemicals fueling the fentanyl crisis or seek to ban TikTok. Congress will continue to support military aid to Taiwan.

The outcome of the midterms is unlikely to shift U.S. policy towards Ukraine. The Biden administration and Congress have to date provided $18.9 billion in security assistance to Ukraine and $52 billion when including financial and humanitarian aid. There are signs bilateral support for additional aid could be weakening, with some Republicans in Congress voicing concern over providing ongoing aid in the face of an economic downturn at home. But U.S. officials are telling Kyiv that America’s support is unwavering. Europe will watch for any shift in support for U.S. assistance to Ukraine. Europe could not offset the flow of weapons and cash to Ukraine if the U.S. were to pull back — and prolonging the conflict worsens the energy and food impacts as Europe also faces recession.

Foreign policy experts are fond of saying that partisan politics ends at the water’s edge. Democrats and Republicans sharing power in Congress are more aligned on global issues than on many domestic concerns, resulting in a ripple, not a wave, at America’s water’s edge.

The Biden administration is pursuing an industrial strategy designed to ensure U.S. leadership and domestic investments in technology, clean energy and innovation, with incentives for “Made in America” investments. This is creating tension with trade allies. The European Union (EU), Japan, South Korea, Canada and Mexico have all voiced concerns that provisions in the Inflation Reduction Act that favor domestic investments in EV’s, batteries and other green tech are a violation of WTO rules. The U.S. is talking with the EU to avoid a trade dispute that could see retaliation against U.S. exports.

Some Republicans are urging the administration to shift its focus to negotiating new bilateral trade agreements, which to date it has resisted. The administration is talking with 13 Asia-Pacific partners on commitments in areas such as labor and environmental standards and digital trade, but progress in the Indo-Pacific Economic Framework (IPEF) may be slow unless the United States is willing to open its market to more of their goods.

President Biden has not requested trade promotion authority, which allows for expedited congressional approval of trade deals, but he could find support for this from both Democrats and Republicans in Congress. The United States will host the Asia-Pacific Economic Cooperation (APEC) forum in 2023, which brings together 21 countries to align around economic and trade cooperation through a year-long set of convenings. That will provide opportunities for Congress to weigh in on the administration’s approach to deepening economic ties across the region.

In the Middle East, the Biden administration is giving up on a return to the nuclear deal with Iran. Republicans oppose the deal. Both parties understand the economic and strategic importance of relations with Saudi Arabia and the Gulf states, even as both are concerned about OPEC+ oil production decisions and warming relations between the region and Russia.

Jim Meszaros


Washington DC | International consultant to governments, multinational corporations and foundations on global economic, trade, development and climate issues.

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