Trade feuds will take on a different hue after the departure of Donald Trump. Slapping tariffs on countries out of the blue isn't US President-elect Joe Biden's style. But his determination to fight climate change could emerge as a new source of commerce tensions.
Biden wants the United States to rejoin the 2015 Paris Agreement to curb global emissions and reach net-zero emissions by 2050. But his focus isn't just domestic. The Democrat's election pledges included a plan to apply a carbon adjustment fee against countries that fail to meet climate and environmental obligations. He also said he would push for labour provisions in any commerce deal that his administration negotiates.
Meeting these promises could set the stage for new tensions with China, which accounted just over 14% of the $3 trillion worth of combined imports and exports reported by the United States in the year to October. Granted, President Xi Jinping is on board with the need to combat climate change. In September, he called for a green revolution and for the first time set a target date by which the world's biggest emitter of carbon dioxide would achieve carbon neutrality. But what Biden views as pro-green, labour-friendly policies, Xi could see as unreasonable hurdles that will hurt Chinese exporters.
Global trade agreements typically leave the door open to differing interpretations and disputes. Countries can take measures to protect the environment, human health, and animal or plant life as long as unnecessary trade barriers aren't thrown up, according to World Trade Organization rules. And America isn't the only country that can play the green card.
China said in November that some imported coal had failed to meet environmental standards. For Australia, whose coal exporters find their shipments stuck in Chinese ports, this was one of a series of punitive trade measures that Beijing has taken since Canberra called for an independent inquiry into the origins of the coronavirus.
Trump was as apt to rile traditional allies such as Europe and Canada as he was long-term rivals like China. But America's partners in the West would probably back any push by Biden to promote environmental standards, especially ones they think they already meet. A fight that pits developed countries against emerging ones could be as ugly as the ones the outgoing president unleashed on the world.