Joe Biden 2.0 offers chance at less global tension

Biden 2.0 scenario. Joe Biden’s re-election could ease global tension. A second term for the U.S. president may lead to less fractious geopolitics and trade friction than his first term in office – as well as a new push to combat climate change. But American allies shouldn’t get their hopes too high as such an agenda would face many obstacles at home and abroad.

As Americans commemorate George Washington and Abraham Lincoln for the Presidents’ Day holiday on Monday, it may seem fanciful to be thinking about another four years of Biden when his predecessor Donald Trump is the clear favourite to win November’s presidential election. But betting odds imply that Biden still has a nearly 30% chance of hanging on to the presidency, despite concerns about the 81-year-old’s memory.

His first administration has hardly been one of global peace and prosperity. Soon after taking office he oversaw a chaotic withdrawal from Afghanistan. That gave the impression the West was militarily weak – and may have encouraged Russian President Vladimir Putin to think he would face little opposition after invading Ukraine.

Biden has also presided over the start of a technological cold war with China. Meanwhile, the protectionist elements of his Inflation Reduction Act, a plan to boost green industry and manufacturing at home, has caused trade friction with allies. More recently, the U.S. president has so far failed to advance his plan to make peace between Israel and the Palestinians.

The rosy outcome

There are, though, reasons to hope a second administration would do better. A re-elected Biden would certainly enjoy a honeymoon period with allies. They are reacting with horror at the prospect of Trump, a Republican, regaining the presidency – particularly after his recent comments that he would encourage Russia to do “whatever the hell they want” to NATO allies that don’t pay more for their defence.

Another term for Biden would create an opportunity to reinforce a defensive coalition between the United States, Western Europe, parts of East Asia and some countries in the developing world, says Michel Duclos, a former French diplomat now at the Paris-based Institut Montaigne. This would build on the network of alliances Biden has strengthened in his first term of office – and could help deter Russia, Iran and China from aggression.

But Western European countries should not kid themselves that they can keep lagging so far behind the United States in military investment. Even with Biden in power, they will need to further increase defence spending, which has been rising since Russia invaded Ukraine, argues David Hannay, a former UK ambassador to the United Nations.

At the same time, Biden will probably continue a policy of détente towards the People’s Republic. Having put in place export controls on advanced U.S. technology and taken steps to prevent the United States being too dependent on Chinese technology, the U.S. president is now looking to manage sensitive issues with Beijing. Chinese President Xi Jinping is reciprocating.

Stable relations with China could, meanwhile, pave the way for another big push on climate diplomacy. The People’s Republic and the United States are the world’s largest emitters of greenhouse gases by far.Although Biden has stepped up curbs on greenhouse gas emissions, U.S. actions are insufficient to hit even his own targets. If he went further in a second administration, Xi may be prepared to do the same, says Michael Jacobs, a professor of political economy at the University of Sheffield. A good moment to do so would be at next year’s U.N. climate conference in Brazil, where all countries are supposed to pledge more ambitious action.

Biden 2.0 could even lead to a rethinking of “economic statecraft” – the use of sticks and carrots to advance a country’s national interest – says Daleep Singh, a former White House official who will return to his previous role as U.S. deputy national security advisor for international economics later this month. He says that the United States should recognise it needs more friends, especially in the developing world, and that reaching mainly for sticks such as sanctions isn’t winning their support.

Singh argues Biden should articulate a new joined-up doctrine of economic statecraft early in a second term. Singh would like to give more emphasis to carrots – such as a $600 billion plan by the Group of Seven rich democracies to help poor countries build sustainable infrastructure.

Hurdles and headwinds

There are many obstacles to realising such a rosy scenario. For a start, even if Biden wins a second term, he may not control Congress. That would limit his ability to do anything that requires large amounts of money. The poor state of U.S. public finances will further inhibit spending.

Fortunately, there are creative ways to fund some policy objectives without hurting the U.S. government’s finances much. For example, Washington could provide loans to Kyiv backed by Ukraine’s claims against Russia for war damages. It could also use guarantees to incentivise the private sector to fund green projects in developing countries – though the Atlantic Council’s Hung Tran points out that Congress still has to approve every guarantee.

Meanwhile, there’s one way to raise money while fighting global warming: to put a formal price on carbon emissions, something the EU and other jurisdictions already do. If that’s politically impossible, Biden has a fiscally neutral alternative: he could tighten regulations against pollution, based on an estimated shadow price for carbon that his administration recently hiked to $190 from $51 a tonne.

Of course, Biden’s ability to defuse global tension also relies on what other countries do. Putin, for example, may keep fighting in Ukraine. And Israel’s Prime Minister Benjamin Netanyahu may keep saying “no” to giving Palestinians their own country.

But Russia itself may tire of fighting if the U.S.-led alliance maintains its support for Ukraine. Meanwhile, Israel may find it hard to resist sustained U.S. pressure over several years, especially if Netanyahu fails to cling on as prime minister.

The era of superpower rivalry between the United States and China is not over – and the rules-based world order will remain under stress for the foreseeable future. But a second Biden victory would raise hopes for a period with less global tension.