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US Democratic presidential nominee Joe Biden addresses voters in Grand Rapids, Michigan, on Oct. 3. (AFP/Yonhap News)

The trade conflict between the US and China may escalate into one between multiple parties -- the US plus its allies -- and China if Democratic Party nominee Joseph Biden wins the US presidential election on Nov. 3, analysts are predicting.

A report titled “Biden vs. Trump: A Comparison of Trade Pledges” published on Oct. 5 by the Korea International Trade Association (KITA) stated that the “made in America” and “buy American” pledges shared by Biden represent “America first” policies that are not much different from those of the Donald Trump administration.

“Hardline policies toward China are likely to continue even if Biden is elected,” the report predicted, adding that “with Biden having said that he will respond to China by means of cooperation with allies, his election will result in the conflict escalating into one of multiple parties (the US and its allies) vs. China.” This suggests that the tensions between Washington and Beijing are poised to spill over into a wide range of areas, including the environment, labor, and human rights.

A look at Biden’s campaign pledges on trade show targets including domestic production within the US and the expansion of investment and jobs at home. Biden has pledged tax plans that involve taxing and otherwise disadvantaging businesses that relocate US jobs overseas, while announcing plans for tax credit policies for companies engaged in production with the US. The adoption of his “offshore tax penalty” would involve imposing a punitive 10% additional tax rate on gains in addition to the 28% maximum federal corporate tax when US companies that have relocated US jobs overseas sell their products and services within the US -- resulting in a tax rate of up to 30.8% (28% + 2.8%).

Biden also plans to provide a 10% tax credit to companies that invest in creating manufacturing jobs in the US. Biden has announced his intent to sign a “buy America” executive order during his first week in office, which would prioritize the use of US-made products in public infrastructure projects. The KITA report predicted, “Biden’s ‘made in America’ and ‘buy American’ pledges are very likely to lead to issues of discrimination against imported products in government procurement and investment.”

In terms of trade agreements, Biden has announced that any new pursuit of trade agreements would happen only after the domestic economy has recovered. On this basis, observers are predicting that he would focus on economic recovery and increasing jobs early on in his term, with international trade issues to be addressed later on. In particular, changes are predicted in the agenda -- and even the continued pursuit -- of trade agreements initiated by the Trump administration with the EU, the UK, and Kenya and a comprehensive “stage two” trade agreement with Japan. The KITA report said, “Intensive implementation of labor and environmental regulations is expected to be emphasized in any new trade agreements pursued by the Biden administration.”

“In the case of the US-Mexico-Canada Agreement (USMCA) that entered effect in July, the terms may be modified with stronger labor and environmental provisions at the Democratic Party’s request,” it predicted. Biden has stated that the US has no intention of rejoining the current Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). If it were to pursue CPTPP membership in the future, it is likely to renegotiate labor and environment provisions, the report predicted.

Regarding Section 232 of the US Trade Expansion Act, which imposes emergency restrictions or high tariff schedules on imports when foreign items are deemed to threaten US national security, the report said, “Because Biden shares Trump’s position of equating economic security with national security, he is expected to continue Section 232 measures on steel and aluminum.”

“But while the Trump administration has made repeated use of Section 232 investigations, Biden has stated a pledge to improve relations with allies, which suggests that he would not initiate new investigations based on Section 232,” it added.

By Cho Kye-wan, staff reporter

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