Can Biden strike a grand bargain
When Biden took office in January 2021, in addition to a raging pandemic, he inherited a raging trade war. Much of the world was as anxious about 45*’s trade war as we were about the risk of a major societal collapse resulting from the pandemic. Looking back at the situation, the rapid worldwide slowing of economic activity due to the pandemic may have averted the trade war turning into a major economic disaster.
Biden was very aggressive in dealing with the pandemic, but very cautious in addressing the tariffs issue. In October 2021 Biden and the EU agreed to mutually remove tariffs on steel imports, but Biden made no changes to the China tariffs in spite of heavy lobbying by US importers. Be it his wisdom or his confidence in his own intuition, apparently Biden recognized that the China tariffs are a big deal and if we give them up we should get something big for it.
As the history of the war in Ukraine begins to come into focus, it appears that by November 2021 US intelligence was convinced of Putin’s intention to invade Ukraine. So as the Pandemic waned, war loomed on the horizon and Biden’s attention shifted toward dissuading Putin from invading Ukraine.
On February 23, 2023, Biden announced the first trench of sanction on Russia for invading Ukraine. However, for sanctions to work, it requires that they be abided by a large number of trading entities in order to get the desired effect. US sanctions became Western sanctions almost instantly, and widely observed sanctions in a relatively short period of time.
In spite of the tariffs the US imposed on China in 2018 still being in effect, China has respected the US sanctions imposed on Russia for its illegal invasion of Ukraine. The effects' of US tariffs, sanctions on Russia, and the slow-down in China’s economy due to the pandemic began to surface as China lifted its zero tolerance policy in December 2022.
Today, Biden is fighting stubborn inflation in the US and is faced with a reelection bid in eighteen months, Xi Jinping in China is facing a shrinking export market due to tariffs, sanctions and supply chain realignments by Western markets, and Putin is loosing his war in Ukraine, he has lost Russia’s oil and gas markets in Europe, and Russia’s manufacturing base is faltering under the weight of US sanctions. All the pieces appear to be in place for a grand bargain, and Biden appears to be holding all the chips.
China has been holding marathon meetings with various leaders from around the world to promote its openness for fair and equitable trade agreements, and its new-found passion for world peace. The US battle with inflation has no momentum after the Feds have raised interest rates nine times, 4.00%, since March 2022. And, Putin is facing another major loss in the upcoming Ukraine counteroffensive. It appears that some shrewd trading between Biden and Xi could force an end to hostilities in Ukraine by year-end 2023, a rollback of US tariffs on Chinese made goods in first quarter 2024, resulting in a reduction in US inflation by July-August 2023 as the tariff reductions roll through to prices, just in time for the election.
The extent to which Ukraine realizes all ten points of its peace plan may well depend on the degree of its success with its upcoming counteroffensive.
Let's hope Dark Brandon can save the day and turn this big deal into a win-win-win grand bargain!
*disgraced former president