What do we know about the Biden administration’s emerging trade policy?

Global trade may not dominate the news in the early days of Joe Biden’s presidency, but it does factor into many of the challenges the United States is currently facing. Mary E. Lovely, a professor of economics at Syracuse University’s Maxwell School of Citizenship and Public Affairs, joins David Dollar in this episode to discuss the resilience of U.S. supply chains, the potential effects of Biden’s “Buy American” policy, U.S. engagement with China, and other early lessons from the Biden administration’s emerging trade agenda. 

Related content:

Memo to the Biden administration on promoting trade to maximize American prosperity and inclusion 

In light of COVID-19, should supply chains be reconfigured? 

What you should know about RCEP, Asia’s new trade agreement 

Transcript

DAVID DOLLAR: Hi, I’m David, the host of the Brookings trade podcast “Dollar & Sense.” Today, my guest is Mary Lovely, a professor of Economics at Syracuse University and a senior fellow at the Peterson Institute for International Economics. Immediately after the election, Mary wrote a memo to the Biden administration on promoting trade to maximize American prosperity and inclusion. We are about one month into the new administration, so this is a good time to take stock of the trade policy that’s emerging and hopefully there is still time to make recommendations. So, thank you for joining me, Mary.

Let’s start with a hot button issue: the resilience of supply chains. There is a lot of concern about the U.S. importing medical equipment or other things related to the COVID-19 pandemic. What should the U.S. be doing to build up resilience? I mean, is there a problem here?

MARY LOVELY: Yeah, it’s a great question. You know, we did see that the unprecedented circumstances of COVID-19 did catch companies and governments off guard. Many countries didn’t have the equipment and medicines they needed to respond. Even today, we are seeing that the U.S. has, in some areas, companies that have a surplus of N95 masks and there are still health care workers who claim they can’t get access to them. So we have supplies in the wrong place, no supply, unmet demand.

This is not just a U.S. problem. The European Union has both been exporting and trying to control exports of now vaccines and vaccine supplies. Mexican hospitals are having trouble getting oxygen; people are dying without access to oxygen. So even today, almost a year into this, we are still having these problems. So the question is, you know, what do we do about it?

A lot of focus has been on so-called resilience. I think it’s something that, you know, C-suites already took account of. Of course, one of the key things in supply chain management is to make sure that your supply chain is resilient. So we have to recognize that what we are experiencing is just very unusual and extreme. So it’s not going to be perfect. We are testing the system.

Then, of course, the other question is to focus on governments. You know, are we witnessing sort of massive government failure? In a lot of ways I think we are. We realize that the government had let stockpiles deplete, had not been maintained. That they have tripped up in their plans to improve supply chains, as in the United States which has funded a lot of companies to turn to producing things like N95 masks and then not figured out how to get them where they need to go.

Read the full transcript.