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If confirmed as president, Joe Biden will reset America’s trading and investment relationship with China, the European Union and other powerhouses in the global market. He will tone down the anti-China rhetoric, if only because he needs help from Beijing on the climate change and pandemic files. He might even trim Donald Trump’s tariffs on Chinese goods.

Much of the rhetoric says America’s relationship with China and other countries that flood the U.S. market with their products will improve if Mr. Biden takes the White House – because it can’t get any worse. Mr. Biden’s neoliberal instincts will surface, and trade will flourish again.

And if you believe that, you may also believe that Mr. Trump will make a gracious exit if he loses.

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The trade fix-it rhetoric ignores the larger theme at play: deglobalization. The isolation trend is in place and is highly unlikely to reverse itself any time soon.

Mr. Trump expertly tapped into the resentment against globalization in his 2016 campaign, and it continues to work for him today. He will either lose or win by a small margin, meaning that roughly half of U.S. voters supported his anti-globalization, anti-China, anti-migrant, pro-wall, America First agenda – there was no mass repudiation of those rallying cries in the 2020 election.

Mr. Biden must realize that trying to buck the deglobalization trend is not going to make his life any easier in the White House. And Republicans will almost certainly retain control of the Senate, where any attempted reversal of Mr. Trump’s stand on China would be resisted by Senate Majority Leader Mitch McConnell (who easily won re-election) and his gang of Biden foes.

Michael Pettis, a senior fellow at the Carnegie-Tsinghua Center for Global Policy and professor of finance at Peking University, thinks the deglobalization story will stay on the boil and almost certainly ensure that the U.S.-China relationship will deteriorate no matter who wins the White House.

“The hyper-globalized world has created all sorts of imbalances and income inequality,” he said in an interview. “There is anti-foreign feeling everywhere, including in the U.S., and that’s not going to be solved by the next president. This explains why the U.S. has turned against countries in Asia and Europe that could have been allies against China, and why anti-immigrant policies everywhere are such vote getters.”

Globalization had roared ahead for decades. That, combined with the cult of shareholder return – the Milton Friedman argument that a company’s only role was to maximize profits – made the rich richer and everyone else poorer. The trend accelerated in 2001, when China was admitted to the World Trade Organization, throwing half a billion lowly paid (by Western standards) skilled and semi-skilled workers onto the world market.

The world became more competitive, and North American and European companies responded by cutting costs and moving production with alacrity to China, Vietnam and other parts of Southeast Asia. Cutting costs also meant suppressing wages, a tactic employed with gusto by Germany after West and East Germany were reunited in 1990, or poking holes in social safety nets and environmental regulations – anything to reduce the expense of pushing product out the door to bolster shareholder returns.

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Still, millions of manufacturing jobs were lost in North America and Europe – the great hollowing out – and inequality became more extreme. The Pew Research Center reports that, in the 50 years to 2018, U.S. households in the top fifth of earners (incomes greater than US$130,000 a year) hauled in more wealth than the other four-fifths combined. The wealth gap between America’s richest and poorest families more than doubled between 1989 and 2016. Income inequality in the United States is now the highest among G7 countries, the OECD says, though the trend is worldwide.

As incomes stagnated even as U.S. productivity rose, the grand bargain began to break down. U.S. workers became angry as they loaded up on debt to try to keep their lifestyles intact. Their anger intensified after the 2008 financial crisis and the deep recession that followed, when the jobless rate rose and banks, automakers and other big companies got bailed out and they didn’t. It intensified again when almost no senior bankers were imprisoned for dishonest behaviour after the 2008 crash, when Barack Obama was president and Mr. Biden was vice-president.

Enter Mr. Trump. He won in 2016 by vowing to end what he called “radical globalization and the disenfranchisement of working people.” China was his main target, with lesser but still intense assaults against the EU and NAFTA. He took Beijing to task for unfair trading practices, espionage and human-rights abuses. He hit China with a barrage of tariffs in 2018. He pulled the U.S. out of the Trans-Pacific Partnership and later yanked America out of the 2015 Paris climate agreement and announced its withdrawal from the World Health Organization, accusing it of being China’s stooge at the start of the pandemic.

The moves played well with his base, as his strong showing in the 2020 election proved. By Friday, he had won almost 70 million votes, the second-highest total in U.S. election history (Mr. Biden was first, with 73.6 million at last count). He killed the Democrats' dreams of a landslide victory, even if the average American family was no better off in 2020 than four years earlier.

Mr. Biden’s trade agenda may not differ much in substance from his opponent’s, though Wall Street, which is much cozier with the Democratic power base than the Republican one, will no doubt lean on him to revive globalization if he takes the White House. The pressure tactics will probably fail. Mr. Biden is smart enough to realize that failure to play tough with China and other countries eager to expand the U.S. trade deficit is a net vote loser.

“I don’t think Biden would reset America’s global trade and investment strategy as much as most countries hope,” said economist Megan Greene, senior fellow at the Harvard Kennedy School. “Whoever wins this election is going to give us an industrial strategy that supports U.S. companies and encourages them to create American jobs. There really won’t be much water between Trump’s ‘Make America Great Again’ and Biden’s ‘Buy American’ strategy.”

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Marshall Auerback, a market analyst and Levy Institute researcher, had a similar take. He thinks the “Chimerica” nexus will continue to unwind no matter who wins the presidency and that Mr. Biden would pursue an America First industrial policy.

“Biden is a Scranton [Pennsylvania] guy and I think he does worry about outsourcing manufacturing,” Mr. Auerback said. “So I could see a situation in which trade policy is ultimately subordinated to national security concerns. In order to secure Republican support for national industrial policy, Biden could push the homegrown strategic industries necessary to maintain U.S. military supremacy.”

Mr. Biden would be more polite and respectful of the Constitution than Mr. Trump was. He would not engage in race-baiting or boorish behaviour. But he would realize that Mr. Trump’s deglobalization policies had a strong following. They might be tweaked under a Biden presidency, not scrapped.

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