As we went to press, Former Vice President Joe Biden appeared on the cusp of winning the Presidency, having defeated President Donald Trump in overnight election results from Wisconsin. As we go to press, Biden has 264 Electoral College votes locked, while Trump has only 214.
The question is, what does this mean for issues the bev/al industry cares passionately about? In particular, trade and taxes?
If Biden lives up to his campaign promises, it could be the worst of all possible worlds when it comes to tariffs and taxes. Historically, Biden has backed free trade, including the 1994 North American Free Trade Agreement and China’s entry into the World Trade Organization in 2001.
But he appears to be shifting to Fair Trade from Free Trade. And that means many of President Trump’s tariffs will remain in place for at least a year, if not more, regardless of whether it’s President Trump or President Biden who takes the oath of office at noon on Jan. 20, 2001.
Biden’s “Made in All of America” economic plan promises a reform of the World Trade Organization, aggressive trade enforcement actions against “state-owned company abuses or unfair subsidies.” In other words, the Airbus-Boeing dispute may not go away. And if it doesn’t, those punishing tariffs on bev/al products may remain.
Biden advisers say any hopes business may have of returning to the pre-Trump trade consensus — continually shrinking trade barriers and a push for globalization — may be whistling in the graveyard.
“There’s a kind of recognition that ultimately the goal of international economic policy is not to make the world safe for multinational corporations to do business,” Jeff Prescott, a Biden campaign policy advisor, told CNBC.. “It’s fundamentally about jobs in the United States, about the middle class at home and building our economy here.”
Brewers hopes for reduced tariffs on steel and aluminum imports will be dead, at least until a global solution to limit excess production, mainly from China, can be hammered out.
You can expect Biden, if he wins, to push to upgrade the nation’s roads, bridges and highways, something that will make the U.S. Chamber of Commerce happy. That should also encourage other business groups, since the nation’s highway system is essentially frozen in time from the 1960s, even as population and traffic congestion have doubled, creating expensive delays in transporting beer, wine and distilled spirits.
Whether he will be able to get that program through Congress is another matter. With the Democrats holding the House but Senate control hinges on four uncalled election results–Sen. Susan Collins of Maine and Joni Ernest of Iowa eased the way for Republicans to maintain control of the Senate–we may be facing continued legislative gridlock.
That may also block his proposals to raise taxes on people earning more than $400,000 a year. But we suspect the Craft Beverage Modernization & Tax Reform Act will at least be extended. The odds of it being made permanent? Better than before the election, since President Trump and Senate Republications will want to lock in as much of their low-tax agenda as possible before Biden assumes office, if he proves to be the ultimate winner.