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MACRO: Geopolitical implications of the new US administration

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( 6 mins)

This piece provides an overview of the global geopolitical implications of the administration of US President Joe Biden. As always, please do not hesitate to contact us if you want to discuss any of the issues mentioned in more detail.


Asia

The officials Biden has appointed so far highlight the importance his administration will place on reassuring Asian allies that the US will remain a “resident power” committed to peace and security in the region. Kurt Campbell, the “Indo-Pacific coordinator” at the National Security Council (NSC), has longstanding ties with allied governments and will lead a large team at the NSC in pursuit of a more competitive approach to China than the Obama administration had pursued but less unilaterally aggressive than the Trump administration.

However, Biden’s team may not only have to manage potential regional flashpoints in Taiwan and the Korean Peninsula during its first year. It will also likely have to continuously reassure anxious Asian allies that it is prepared to meet its defense commitments and is not looking to cut a deal with Beijing. Southeast Asia will look keenly to trade signals and push for greater multilateralism by Washington, given how the region would like to see a multipolar balance of power emerge between the different regional players. For example, Tokyo fears that the new administration’s focus on climate change could lead it to compromise on other issues. Meanwhile, Seoul may have unrealistic expectations for the new administration’s willingness to pursue diplomacy with North Korea, particularly if Pyongyang tests longer-range ballistic missiles early this year.

In both India and Pakistan, governments will be wary. New Delhi will wait to see if Biden deepens sanctions on Russia, which would hit India’s defense procurement plans. For Islamabad, it is enough that relations with the US should normalize to pre-Trump levels of engagement.

Europe

The Biden administration will have to contend with the EU’s recent push for “strategic autonomy,” essentially Brussels using a multilateral approach when possible but acting autonomously to protect the Union’s interests when needed. On China, for instance, the EU’s preference is to work with Washington to reform global trade rules to pressure Beijing rather than “decoupling,” as exemplified by the EU-China Comprehensive Agreement on Investment (whose ratification remains uncertain). Whether the EU would be willing to partner with the US to use its recently approved global human rights sanctions regime (“European Magnitsky Act”) against China is unclear. Coordination on this front regarding Russia seems more likely, although some member states will be reluctant to further pressure Moscow.

On the transatlantic trade front, Brussels will push for a quick removal of the steel tariffs imposed by the Trump administration, while EU policymakers aim to find a solution to the Airbus-Boeing dispute within six months. Both sides will also have to find consensus around a potential OECD-wide digital tax; short of an agreement by mid-2021, Brussels will move with an EU-wide levy. Finally, the EU’s push to regulate digital platforms could facilitate a common transatlantic position on the matter.

Middle East and North Africa

Like its two predecessors, the new administration will seek to “right-size” the US commitment to the Middle East. Biden’s team will emphasize US diplomacy and economic engagement after almost two decades of post-9/11 policy that had put a heavy focus on military instruments. The region may not cooperate.

The leading challenge is Iran, which is likely to blend overt diplomacy and covert aggression to force US engagement. Iran’s principal regional antagonists—Israel, Saudi Arabia, and the UAE—are likely to keep a focus on Iranian malfeasance while straining against US efforts to diminish its regional footprint. The administration’s intention to create more distance from the three traditional partners runs the risk of diminished influence when tensions are rising. Other US partners will also feel a colder US shoulder, especially Egypt and Bahrain. It is unclear how much energy the Biden team will put into salvaging deteriorating economic conditions in Iraq and Lebanon.

Least clear is the Biden administration’s strategy toward China’s growing Middle East role. The Biden team may not sustain the Trump focus on keeping China out of local communications networks, and it may be willing to let China play a larger role in a troublesome region.

Latin America

The region will represent a second-tier foreign policy priority for Biden, who is likely to put emphasis on climate change and the green energy transition. There will also be an increased focus on human rights and democracy, though Biden will want to stress his belief in partnership and multilateralism. Renewed trade engagement and pandemic-related assistance could be early tools of US policy towards the region. How this stands up to China’s advances in the region remains to be seen.

Overall, however, Biden is likely to formulate a much more differentiated approach to Latin America, including a new focus on Central America, with development aid to the isthmus increasing. This could shift the focus of bilateral relations with Mexico away from migration to new areas of tension centered on labor, environment, and security issues. No bold policy shifts towards Cuba or Venezuela are expected; the latter will retain the capacity to cause spillover problems in the region (e.g., migration) that Biden may be forced to address. The relationship with Brazil will be difficult until a new equilibrium is found regarding Amazon deforestation and fires.

Africa

A fundamental reset in US-Africa policy seems unlikely, but the greatest upside of a new administration may be greater predictability, not least in global trade relations. Under Biden, familiar longer-term trends will probably prevail: Africa ranks low on the global list of priorities. Yet, the return of Obama administration veterans may spell a change in tone and emphasis from the Trump administration. An important personnel choice to watch will be that of the new Assistant Secretary of State for African Affairs.

While security issues will continue to dominate US-Africa relations (as they did under former president Barack Obama), a reversal of Trump’s aid cuts and a greater focus on development cooperation (including climate change) can be expected. African governments will also welcome a US return to multilateralism (be that the WHO or climate accords). However, more predictable diplomacy will not resolve the single greatest challenge of 2021: vaccine access. On this issue, Western vaccine nationalism – and the likely limits of Covax – may give China a new soft-power tool to expand its strategic influence across Africa.