Economists weigh in on post-election activity
The US election period may be over and a new president inaugurated, but ASB economist Nathaniel Keall says that it’ll be a while before Kiwis can stop thinking about US politics - particularly when it comes to issues such as international trade.
Keall noted that the Biden administration has “hit the ground running,” and a host of executive orders have already been signed to reverse many of the more controversial Trump policies, including putting a stop to US-Mexico border wall construction, and re-entering the WHO and Paris Climate Accords.
He says that given the influence of the US over the global economy, it’ll be some time yet before New Zealand can comfortably look away, particularly with the COVID-19 pandemic still raging on across all states.
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“It might be tempting to think we can all stop thinking about American politics again, but given the United States’ influence over the global economy that’s an unlikely prospect,” Keall said.
“Item one on the Biden agenda will be to speed up the US vaccine rollout, which is running ahead of most developed countries, but still a massive logistical challenge.”
“Most pertinently for Kiwis, it will be worth watching for more clues on the Biden team’s approach to international trade,” he continued. “Free trade advocates will be hoping for a departure from the Trump era, which saw the US-China trade war commence and tariffs whacked on US friend and foe alike.”
Politics commentator and Alavan Business Advisory director Alastair Newton noted that Biden may well be “less wedded to tariffs” in comparison to Trump, but that they will likely still be used as a way of getting concessions - particularly out of China.
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“It is clear that Biden fully intends to work with Beijing, and Beijing will actually welcome that,” he said. “He will also be much more successful in putting together a ‘Western consensus’ in how to deal with this - and in that I include countries like Japan, India and Australia and New Zealand.”
“New Zealand managed to weather the trade war with little disruption, with annual exports hitting new highs through the Trump era,” Nathaniel Keall explained.
“But US-China trade tensions under the Biden administration could follow a different shape, particularly if Biden seeks to enlist allies from elsewhere in the Asia-Pacific in a less disorderly, more multilateral way.
“So even with Donald Trump out of the White House, we might not have seen the last of the surprises out of the US just yet.”
