Regulations, trade policy and the health of the economy are the three topics most important to the auto industry as President-elect Joe Biden prepares to take office, the Center for Automotive Research says.
Democrat Biden and outgoing Republican President Donald Trump have taken up fundamentally different positions on regulations, CAR said in a report released in October. While Trump has viewed regulations as barriers to economic growth, Biden has supported the use of regulations to achieve his broader goals, especially that of combating climate change.
Biden has committed to rejoining the Paris Agreement, an international treaty aimed at curtailing global warming, and to enacting policies that would bring the U.S. to net-zero emissions by 2050. He has proposed spending $2 trillion for clean-energy initiatives, including setting higher fuel-economy standards and committing the federal government to purchasing zero-emissions vehicles.
The president-elect likely will withdraw federal lawsuits seeking to roll back California’s air-quality standards. Biden also plans to expand electric-vehicle purchase incentives and to build a network of 500,000 EV charging units (below) by 2030.
While Trump has broken with the Republican party’s past support for free trade, implementing tariffs and other protectionist measures with the aim of reshoring U.S. jobs, Biden has supported trade liberalization in the past – but with special provisions for labor and environmental standards, CAR says.
Biden has said he would strictly enforce provisions of the U.S.-Mexico-Canada Agreement that took effect July 1. A Biden Admin. is not expected to make significant changes to the USMCA during the next four years.
Biden and Trump agree China is a global trade violator. But while Trump has sought bilateral deals with Beijing, Biden plans to take a multilateral approach to balancing China’s economic power through more vigorous enforcement of existing trading rules and support for the World Trade Organization.
The CAR report, released prior to the election, also said, “The top economic priority of either a Trump or Biden presidency must be getting the COVID-19 pandemic under control and supporting the U.S. economic recovery.”
The report noted different approaches between the two candidates, with Trump opposing significant federal assistance to state and local governments – curtailing recent attempts to pass a recovery spending bill.
Biden’s plan conforms more closely to Congressional Democrats’ priorities and includes a larger overall spending target (including significant direct aid to states and local governments) than Trump has been seeking.
With Democrats maintaining control of the House following the Nov. 3 elections and with the possibility of regaining control of the Senate in 2021, “many Democratic spending priorities could win out as part of an economic assistance package in early 2021,” the report said.
Biden's $1.3 trillion infrastructure plan specifies moving to net-zero greenhouse gas emissions, and includes plans related to strengthening the electrical grid and building EV charging networks in addition to roads, bridges, rail, 5G and rural broadband. He plans to fund his infrastructure spending by reversing some of the Trump tax cuts on corporations and higher-income individuals.
The president-elect also has pledged to incentivize “made in the USA” and reshoring through a 10% tax credit for companies that create U.S. jobs. Biden also plans to overturn several Trump tax policies to raise revenue not only for infrastructure spending, but also for broader government programs such as education and health care.
Biden would raise the top rate for individuals back to 39.6% (from the current 37%) and the top corporate income tax rate to 28% (from the current 21%).
The nonprofit Tax Policy Center estimates 75% of the Biden tax hikes will be borne by those in the top 1% income bracket, according to the CAR report.