What has happened to American foreign policy since the Nov. 8 midterm election? In particular, how has American economic statecraft changed in the aftermath? The simple answer is that not much. Since the election results were announced, neither the Senate nor the House has been noticeably pro-Beijing/pro-free trade.
However, it remains to be seen if the two parties will prioritize a common agenda for American workers now that they share power.
Even if “not much”, what has done to improve? The House is where there are the most differences. They will now be the ones to lead, appoint the committee heads and set the overall agenda. House Speaker Nancy Pelosi has been the longtime leader of the Democrats. She was a vocal critic of the People’s Republic of China even before her trip to Taiwan this summer. With Steny Hoyer, her Maryland wingman, also stepping down, the House Democratic leadership will likely fall to Hakeem Jeffries, a New Yorker who has a poor record on China and foreign policies generally.
The Foreign Relations Committee is now headed by Michael McCaul, a Texas Republican. McCaul’s recent statements may have encouraged supporters of economic statecraft. He has not only highlighted China as a threat to national security but also stated that he wants to bring more manufacturing back to America. McCaul also founded the Congressional High Tech Caucus which supports domestic tech industries. McCaul will be supported by Steve Chabot, who was a ranking member of the subcommittee Asia, the Pacific and Central Asia and Nonproliferation and is a vocal China hawk. It is notable that Vern Buchanan, a Florida resident, will be heading the House Ways and Means Committee. He has a lot to say about winning ” economic war” and strengthening U.S. manufacturing.
The Republican leader Kevin McCarthy from California has faced one challenge under his leadership. Given the chaos that could ensue if he fails to do so , it is likely that he will do it again when the House votes on its next speaker. McCarthy’s foreign policy has been more on East Asia than the Middle East. However, he has long admired the creation a select committee on China, seeing it as an area for bipartisan compromise. These efforts were thwarted by the pandemic that struck in early 2020. However, he recently promisedthat such an advisory committee would be a reality if his bid for the speakership succeeds.
The midterms will have a much smaller impact on the Senate where party control won’t change. Pennsylvania Republican Pat Toomey will step down and be replaced by Democrat Lieutenant Governor. John Fetterman. Toomey would be unfair to label a China dove. By any means. However, Toomey, a Club for Growth-endorsed Toomey, has been a strong supporter free trade. He requested exemptions from tariffs on Chinese goods, and earned a rebuke form the Coalition for a Prosperous America.
Fetterman has only held statewide office and local office in Pennsylvania, so he is relatively untested when it comes to foreign policy. At least not yet, his sound bites don’t suggest accommodations toward Beijing. However, close relations with unions and a more worker-friendly stance suggest that Fetterman could channel this support into reshoring efforts. Fetterman will, however, be a first-term senator, with very little influence at first. The Senate’s Democratic control means that there is minimal turnover at the top of relevant committees. The Senate Democrats will continue to head Foreign Relations, headed by Bob Menendez, a New Jersey senator who is hawkish. In addition, the Senate Finance Committee, which serves as a counterpart to House Ways and Means, will remain under the leadership and direction of Ron Wyden, an Oregon senator who has much to say on Chinese ” cyber authoritarianism“, and the need for combatting it.
What does this all mean? One, the Biden administration’s two major legislative victories of 2022, the CHIPS and Science Act and Inflation Reduction Act (both designed to reshore high tech industries), are safe. Both elected members of the parties and their voters are disapproving of the PRC. If the government is divided, it will be difficult for the Biden government to pass major legislation.
There are still new opportunities to diminish the influence of the PRC over U.S. supply chain, reshoring manufacturing and partnering with friendly countries who enjoy comparative benefits that the U.S. doesn’t. It is not clear whether representatives will take advantage of these opportunities.
The Ohio Senate race is perhaps the most clear example of the bipartisan view emerging on the PRC challenge. J.D. was elected to the Senate in Ohio, just like other Midwest campaigns. Like other campaigns in the Midwest, Senator-elect J.D. The Hillbilly Elegy writer’s message resonated best with Ohioans. He was given a mandate to run for the Senate as someone who won’t serve America’s lunch as his predecessors.
While the Republican Party’s neoliberals, free-marketeers may still advocate for fiscal conservatism as well as trade liberalizations, they will not win support from the rapidly changing electric vehicle belt. This disdain for free-trade agreements was first recognized by the Trump administration’s populist Republicans, which included the former president. It seems that a few Democrats are now catching up. This transformation is well-known by Democrats in mining and manufacturing states. The support of her state’s mining by Catherine Cortez Masto, a newly elected senator from Nevada, is an example. Along with Joe Manchin from West Virginia, she joins the Blue Dog Democrats. She is leaving the progressive Democratic Party’s utopian wing and adopting more practical measures to boost supply chains and promote job creation. She could be the right policy divergence for a strong critical supply chain of minerals.
China will benefit from the fact that the PRC has control over several important mineral value chain. Nevada is the largest producer of gold, silver and barite in the United States. It also produces the most mined magnesite, mercury, and diatomite. Complementary public policy is required to restore American manufacturing supremacy and transform the economy into a new industry that produces semiconductors and batteries. It will be foolish to stop the operation of the country’s only active lithium mine, while China processes 80 percent of the vital mineral. Fortunately for America, the mining state has a Democrat who understands the importance of this policy.
A different horseshoe theory emerges when it comes to foreign policy, and especially the PRC. It’s a coalition of Blue Dog centrist Democrats and economic populists on the right. Even though they have different motives, the doves are both the free marketers and progressives. Midterm results indicate that American voters oscillate between the center and the far right in their choices for leadership, even if China, trade and foreign policy were on ballots.
What are the priorities of the new Republican majority in Congress? Do they see the PRC as a greater threat than Joe Biden? There are still opportunities for bipartisan cooperation if they do. Early signs indicate a focus upon the inner workings the incumbent administration; it is possible to worry that a focus only on Biden’s missteps and his family might distract from the PRC’s influence on American supply chain chains.
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This does not mean that Hunter Biden’s dealings with foreign actors are not worthy of scrutiny or that every dollar spent to help Ukraine repel Russia was properly spent. We recommend not to give up on oversight of the Biden administration. However, it is important to maintain a balance. Keep the course. We recognize that the reshoring agenda has benefits for American national security and American jobs. It also helps Republican electoral prospects.
The Biden administration’s economic statecraft agenda will be outlived, no matter who the president is in January 2025. Trump, the former President, has stated that he will be seeking reelection in 2024. However, he faces sterner challenges in 2024 than in 2016 and likely 2020. Florida’s Governor is his strongest opponent. Ron DeSantis has been a strong proponent for his state as a tourist and partnership for other countries, especially those that have been friendly to the U.S. He also supported legislation to limit the influence of hostile nations in his state, including the PRC.
Trump will have many advantages in a head to head contest with DeSantis. He will be more well-known, better natural oratory and his own role of GOP kingmaker. DeSantis was able to benefit from this position in his first run for governor. The price that the former president has to pay for changing Republican orthodoxy regarding trade and relations with China is that his 2024 rivals are less likely than in 2016 to be out of touch champions of the old consensus. The 2022 midterms have taught us that America First economic statecraft may outlive Trump and Biden.
