World politics has entered a new era as Joe Biden settles into the White House as the 46th President of the United States. But what will that seismic shift of power from the disruptive and divisive Donald Trump to the inclusive and embracing Mr Biden mean for UK business?
Much is made of the so-called “Special Relationship” between the US and the UK but what we know about Mr Biden so far is that we shouldn’t expect any special favours.
Mr Biden has been around the block. As a politician he’s seen and done it all and if there’s something he doesn’t like he’ll call it out. He’s made no secret of the fact he wasn’t a fan of UK Prime Minister Boris Johnson. He branded him a “physical and emotional clone” of Trump in 2019. That’s not at all flattering for Mr Johnson if he wants to wield influence on the world stage. And Mr Biden didn’t support Brexit either. He called it a “mistake.”
His dislike for Mr Johnson and Brexit – the two very much come as a pair – doesn’t bode well for the UK’s hopes for a quick and easy trade deal with the US. Mr Johnson will want to cement positive relations very quickly with Mr Biden’s administration but there’s likely to be some ‘social distancing’ going on – and that will have nothing to do with Covid-19.
Mr Biden did make his first call to any global leader a call to Mr Johnson but that was probably just smart diplomacy. He may have extended the hand of friendship but he’s likely to give Mr Johnson the hard word. Britain has isolated itself from Europe and Mr Biden seems to see the strength in a united Europe. He likes the EU, and it would be no great surprise to see Mr Biden agree closer ties, maybe before he signs up to a deal with the UK.
Mr Biden has ancestral roots in Ireland which means he’ll take a keener interest in UK and EU affairs especially where the island of Ireland is impacted. It remains to be seen which world leader will host a first presidential visit from Mr Biden, but he’ll touch down on UK soil in June for sure.
The G7 summit, hosted by Mr Johnson, will be held near St Ives in Cornwall. If that was to be Mr Biden’s first overseas trip then it would be claimed as a coup by Downing Street. The summit will be the first time the prime ministers and presidents of the world’s leading industrialised powers – the UK, US, Germany, France, Italy, Canada and Japan – will have met for two years.
The aftermath of the Coronavirus pandemic will be top of the agenda. Mr Biden has already announced plans to spend $1.9tn (£1.39tn) on a stimulus package to help the US “build back better.” Mr Johnson, as President of the G7, has already adopted the same phrase. He sees the pandemic as a chance to reset the world’s priorities with collaboration and responsibility for the global environment at the heart of the new world order.
Mr Biden will reverse the climate change-sceptical policies of his predecessor, but his focus remains within US borders. He’s got trouble at home – a vast and diverse country to reunite after the divisions stoked by Mr Trump. So, will he see American jobs, economy and infrastructure as his priority? In a word – Yes. That’s probably the only thing Mr Trump and Mr Biden agree upon. They want to make America great again.
At least UK business will know what Mr Biden stands for. It will be glad of some certainty, a strong and predictable leader who isn’t likely to go off at a tangent like Mr Trump. There will be no knee-jerk reactions from Mr Biden. He’ll be hard but fair but at least UK business will know who and what they are dealing with. He’ll be consistent. There will be challenges, of course. US agribusiness still wants access to the UK market. Chlorine-washed chicken and hormone-treated beef will test UK resolve and patience.
Mr Biden is from Delaware, the state which is one of the USA’s largest chicken producers. Just as fish was a stumbling block to a Brexit agreement, so chicken will threaten to fry hopes of an early US-UK trade deal. Mr Biden set his stall out with one of his first executive orders – to replace the entire US federal fleet of cars with electric vehicles manufactured only in the United States. It was part of his pledge to create one million new jobs in the American automotive industry.
Mr Biden wants to prove his ‘green’ credentials and boost the US economy at the same time. He intends to make the US the global leader in electric-powered vehicles. The full might of the US federal government will be deployed to that end. The UK had eyes on that prize. The UK wanted dominance in battery and EV technology, but Mr Biden is set to blow that ambition out of the water.
It could also signal bad news for further expansion at car maker Nissan’s plant in Sunderland, which sees battery production as key to future growth. Nissan says the Sunderland plant, which employs 6,000 people directly and another 7,000 in the supply chain, is secure for the long-term after the last-gasp Brexit deal. But investment is needed to make batteries in the UK otherwise there are fears the UK’s auto industry could be overtaken, not just by the US but China, Japan and Europe too.
Mr Biden will certainly ramp up competition for UK PLC but this, after all, is what Mr Johnson wanted for the UK post-Brexit. He wanted the UK to be a confident, go-it-alone world power able to make its own deals and do business on its own terms. Freed from the shackles of the EU it’s down to Mr Johnson to prove that British business can punch above its weight in a global market.
Written by Richard Alvin, Group Director at Capital Business Media