Biden has replaced Trump’s America First policy with the so-called Foreign Policy for the American People, originally conceptualized as Making US Foreign Policy Work Better for the Middle Class. The strategic rationale underpinning the new policy is the need to strengthen America domestically in order to enable it to compete with China internationally as well as the need to reconcile domestic political and economic imperatives with international goals.
Foreign Policy for the Middle Class?!
In addition to issuing an Interim National Security Guidance, the administration has identified the major foreign policy challenges facing the United States as: defeating the pandemic; overcoming the economic crisis; renewing democracy; creating an effective and humane immigration system; revitalizing alliances, confronting the climate crisis; maintaining technological leadership; and confronting China (“biggest geopolitical test of the 21st century). Note that the first four issues are largely or purely of a domestic nature. This is consistent with new Biden policy, as it seeks to address domestic needs and lay the foundation for the domestic strengthening needed to compete with China over the longer term.
The focus on strengthening America politically and economically is also reflected in the huge Covid-related fiscal stimulus administered earlier this year as well as the two proposed, equally huge “infrastructure” investment programs. The so-called “hard” infrastructure program has received limited but sufficient bipartisan support in the Senate, even though it had to be substantially slimmed down. The “soft infrastructure” spending program, largely focused on social and economic issues, is currently being pushed through Congress along partisan lines with the help of budget reconciliation. The Biden administration is making good on its promise to overcome the economic crisis and improve the medium-term economic outlook. At least, the “hard” infrastructure program should prove helpful.
The Biden administration has been much slower to shift its trade policy. While it has made notable progress resolving long-standing transatlantic disputes (e.g. Airbus/ Boeing, digital tax, steel and aluminum tariffs), it has thus far made virtually no changes to the broader trade strategy, including its stance vis-à-vis WTO reform and trade relations with China. Trade Promotion Authority having expired in July, the administration does not seem eager to open a political flank domestically by reviving talks about a transatlantic free-trade agreement (TTIP 2.0) or rejoining its transpacific cousin (CPTPP). Although these are, or should be, crucial elements of a broader geo-economic strategy towards China, the administration is prioritizing domestic issues over a broader, politically sensitive geo-strategically-oriented trade policy – for the time being.
China remains most important driver of US strategy
Biden has also largely left unchanged its predecessor’s geo-economic, geo-financial and geo-tech measures aimed at China. This speaks to the new administration’s preoccupation with China. Meanwhile, the China policy enjoys wide-spread bipartisan support, backed – for what it’s worth – by public opinion. In spite of domestic hyper-polarization, the Senate even managed to pass the so-called Innovation and Competition Act worth a significant USD 250 bn on a bipartisan basis with relative ease. (Passing the hard infrastructure program was much more difficult.) China seems just about the only thing that enjoys significant bipartisan support in Washington these days. No doubt, the “China threat” can be mobilized by domestic political interests to generate support for a domestic reform agenda. If that is the case, this has not been very successful. Otherwise the debates over the investment programs should not have proven so acrimonious.)
China visibly remains front and center in US foreign policy. Although Secretary of State Anthony Blinken stated that “[o]ur relationship with China will be competitive when it should be, collaborative when it can be, and adversarial when it must be”, the adversarial aspects appear to have dominated thus far. Leaving aside bad atmospherics (Alaska meeting), the Biden administration has accused China of “coercion” and “intimidation”, while re-iterating that it views the Indo-Pacific region as “critically important to our nation, its security and prosperity”, (VP Harris). Washington is also trying to re-energize the so-called Quadrilateral Security Dialogue between the US, Japan, India and Australia, while strengthening bilateral security ties with both Japan and Korea (and even the Philippines) and reiterating its long-standing commitment to freedom of navigation as well as Taiwan.
The US decision to pull out of Afghanistan should also be read against the backdrop of Washington’s broader grand strategy. Leaving aside the potential risk of future terrorist threats, American interests in Afghanistan are limited. Besides, estimates have put the cost of Afghanistan war and post-war reconstruction at roughly one trillion dollar and an annual cost of 50-80 billion dollars. To put this into perspective, total costs amounted to 5% of 2020 US GDP and annual running costs were equivalent to 10% of defense outlays. By comparison, PACCOM seeks USD 27 bn in additional spending between 2022-27 as part of the Pacific Deterrence Initiative(or less than USD 5 bn annually). In strategic terms, ending the US Afghanistan presence is consistent with the broader strategy of focusing on China.
US China strategy informs transatlantic rapprochement
Last but certainly not least, the Biden administration is mending fences with its European allies. “America is back” and this has facilitated an improvement in transatlantic relations, particularly on selected economic issues (e.g. Nord Stream, Airbus-Boeing, taxation, digital tax). The desire to improve transatlantic relations, while no doubt desirable in its own right, also needs to be seen in light of intensifying US-China rivalry. Reviving traditional alliances and wooing European allies in the hope that they will line up behind a more hawkish US China policy was already evident at the various international summits during Biden’s visit to Europe, even if, admittedly, US pressure has remained relatively gentle and America’s European allies have successfully resisted it US advances so far. (France objected to extending NATO focus to Asia, and Germany objected to a broader geo-economic pressure strategy targeting China.) Nonetheless, intensifying US-China rivalry will lead to increased pressure on Europe to align itself with US policies. US concerns about the EU’s now effectively defunct bilateral investment treaty with China is just one example of transatlantic friction to come.
Barring unforeseen events, the US will continue to execute on its foreign policy strategy. China, in the eyes of the United States, is and will remain the “biggest geopolitical test of the 21st century” – and the century has only just begun – forcing the United States to play The Long Game. The US is set to accelerate its diplomatic, security and economic pivot to Asia in an attempt to balance (or contain, if you will) an ascendant and assertive China. Effectively, the US is currently pursuing – in the guise of the Foreign Policy for the American People – a strategy of what International Relations scholars call internal and external balancing. External balancing involves strengthening alliances, and internal balancing involves efforts aimed at enhancing a state’s economic and military power.
China is rare issue commanding bipartisan support in Washington
In other words, in order for its China strategy to be successful and credible, the US needs to mobilize greater resources domestically as well as externally. This is exactly what the Biden is trying to do with its semi-aptly named Foreign Policy for the American People – with the notable exception of domestically sensitive international trade policy (which remains under review). Although China is just about the only item on the State Department lists of challenges that enjoys bipartisan consensus, continued high levels of domestic political polarization may yet limit the ability to push forward with domestic strengthening in order to “compete without catastrophe”. If that is the case, the US will have little choice and push for greater external balancing, namely, push allies to align with, and mobilize greater resources in pursuit of, America’s China strategy.
If this logic is correct, American diplomatic pressure on Germany will increase. Any US China strategy will involve geo-economic policies. Such policies would see Germany being caught between the proverbial fronts in terms of trade, investment and technology. For example, US secondary sanctions and Chinese threats of countersanctions, including against foreign-owned companies in China, makes for a very unpalatable prospect. Germany’s far greater dependence on trade with the US and China (than vice versa) is another challenge. Last but not least, a more hawkish US geo-economic policy towards China will affect Germany, as Washington is quite unlikely to allow Berlin to play the role of a so-called third-party spoiler. Hence: the creation of a robust national and EU-level geo-economic toolkit to deter or deflect geo-economic pressure and/ or mitigate the consequences of US-Chinese geo-economic conflict needs to be combined with a forward-looking policy aimed at mitigating Germany’s existing economic and technological vulnerabilities.