Joe Biden’s win in the U.S. presidential election is likely to change global dynamics in business in areas of climate change, outsourcing, and healthcare. It will likely reverse the trend of declining multilateralism and globalisation under outgoing U.S. President Donald Trump’s policies.
It will restore the position of the U.S. in the eyes of the global community as a vibrant, rules-based democracy open to talent from around the world. It will also bring the U.S. and its traditional allies in Europe, Japan, South Korea, and Australia closer. It will likely strengthen the NATO (North Atlantic Treaty Organization) and increase U.S. alignment with Europe on key global issues such as climate change and their responses to Russia.
Biden’s win is also likely to bring back a rules-based World Trade Organization (WTO) and give world trade a new lease of life. Under him, the U.S. is likely to enhance the United States-Mexico-Canada Agreement (USMCA which is a renegotiated North American Free Trade Agreement or NAFTA) by mending relations with Mexico. The U.S. may also re-join Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) earlier called the Trans-Pacific Partnership (TPP). Biden’s win is likely to reduce friction between the U.S. and Iran, China and even allies like Germany. But the recent normalisation of Israel’s relations with the U.A.E. and Bahrain, which was brokered by the U.S. under Trump, could face challenges. Biden administration is likely to act tough with the current regime in Russia and Saudi Arabia on issues of human rights.
Biden’s win will impact India on multiple fronts. His views on immigration and visas are likely to be softer than Trump’s, which would be better for Indian software companies (which make use of the H-1B visa extensively), and Indian students planning to study in the U.S. Defence and strategic collaboration with India is likely to continue as both countries have similar world views on freedom of navigation in South China Sea, and strengthening of the Quadrilateral Security Dialogue (Quad) in Asia. Also, the U.S. and India could be on the same page on clean energy. Biden supports clean energy and India promotes the International Solar Alliance, and these views could converge.
Biden, who would be the 46th U.S. President, is likely to rely on conventional foreign policy run by professionals and think tanks, unlike Trump’s Twitter diplomacy. This will ensure more consistency in foreign policy and hence it will be easier for Indian companies planning to enter or expand their business in the U.S. Indian companies have historically imported crude oil from Iran and have been involved in building infrastructure projects like the Chabahar port there; these were under a cloud with deteriorating U.S.-Iran relations under Trump. Biden may revert to Obama’s policy of better relations with Iran and hence it would be better for Indian companies doing business with Iran. If sanctions on Tehran are removed with better control on their nuclear programme, Iran will ramp up crude oil production and exports, leading to lower crude oil prices globally, which is good news for India as its crude oil import bill will come down.
With a close presidential race and a divided country, a lot of focus of Biden in the initial years is likely to be on domestic policies such as the fight against Covid-19 and hence more investment in healthcare and possible revival of Obamacare policies. This may have a positive impact on Indian pharma companies, especially generic medicines. Indian vaccine companies, which are some of the largest in the world, can supply vaccines to the U.S. as the new administration would listen to scientific advice and speed up prevention and cure measures. Also, there could be easier visa policies for Indian nurses and doctors to work in the U.S. There is also a possibility of better trade ties with India and a possible signing of a free trade agreement, leading to restoration of GSP benefits (Generalized System of Preferences benefits, which provides duty-free treatment to goods of designated beneficiary countries) to Indian exporters and easier two-way investments.
The Indian American diaspora and their success in the U.S. are the real backbone of Indio-U.S. relations. The diaspora’s support for the Democrat's win is likely to ensure continued focus of the new U.S. government on India and lead to better long-term relations.
The U.S.-China trade and technology war under Trump had disrupted not only these two nations but had a huge impact on global supply chains and hit global economic growth. Trump’s blow hot and cold policies on China also hurt many American companies and consumers. Biden is likely to maintain pressure on China but in a more nuanced manner, building consensus with European and other allies like Japan, and India, ensuring minimum damage to the world economy, U.S. companies and global multinationals.
Not everything will be positive, though. Some Democrats, especially Vice President-elect Kamala Harris—though of Indian origin—had raised difficult questions on sensitive issues such as human rights in India in the past. Once Biden becomes President, he and his deputy are likely to focus on convergence with India and its current government, as New Delhi is a key partner for Washington, especially in Asia. Further, with no clear majority in the Senate for Democrats, they are likely to face difficulties in passing stimulus packages and other key policy decisions needed to revive the U.S. economy, and by extension, the global economy. Biden is likely to raise taxes on big companies and rich individuals, but these policies may be blocked by the Republican majority in the Senate.
In conclusion, Biden’s election as U.S. President is likely to have a big impact on climate change, geopolitics, and multilateralism.
Views are personal. The author is faculty, international business & strategy, and co-chairperson of international relations at Bhavan’s S.P. Jain Institute of Management and Research (SPJIMR), Mumbai.