New trends in the US of interest to Europe

Joe Biden

The United States began a new political cycle with the inauguration of Joe Biden on 20 January 2021. The administration's first steps clearly exemplify this change through ambitious policy and legislative initiatives. As a consequence, many trends in American politics are changing.

The report "New trends in the US that matter to Europe: a new political cycle", which I directed for Fundación Alternativas, reviews the main changes in the United States during the first months of the Biden-Harris administration in the transition to the new normal after Trump's mandate and the pandemic.

The text covers a long list of key issues, be they political (democracy), social, economic, technological/digital, environmental or multilateral. It also emphasises the relationship between these internal transformations and the European agenda. As for the main trends, we have tried to discern whether they are circumstantial (i.e. reversible) or structural (more profound and with medium- and long-term consequences).

The report identifies nine trends that we consider particularly relevant from a European perspective:

  • The first trend is the shift from 'America First' to 'Democracy First', which responds to the pressing need to re-establish confidence in the democratic system and democracy in the US. After Donald Trump's controversial four years, marked by political and social polarisation, populism, trade protectionism and a clear lack of international leadership and multilateralism, culminating in the storming of the Capitol on 6 January, the slogan 'America is back' exemplifies the changes sought by the new administration both domestically and internationally. However, Trumpism and national populism are still very much present today, growing in some cases in Europe, which could slow down this process.
  • A second trend is the shift towards a new paradigm with a strong social content, committed to the middle classes in a post-pandemic context. This is associated with the idea of a need for a strong state, and a large increase in public investment at the national level and a government with sufficient weight to face the challenges posed by the pandemic. Hence the legislative packages sent to Congress to ensure economic and social recovery, totalling some 6 billion dollars: the "American Rescue Plan", "Infrastructure Plan", "American Jobs Plan", and "American Families Plan".
  • A third trend is the so-called "tax revolution" to finance an inclusive strategy to exit the crisis. To this end, Treasury Secretary Janet Yellen has proposed a substantial increase in taxes on large corporations and multinationals (from 21% to 28%), including the Big Five - Alphabet (Google), Apple, Facebook, Microsoft, Amazon - a global minimum tax on large corporations finally of 15% - supported by the OECD and Europe - and even a tax on large fortunes in the US (the richest 1%). This change in trend is making a decisive contribution to unblocking similar proposals in Europe because of the implications for the global tax system.
  • A fourth trend is the rise of feminism: the US is turning "purple", with women's prominence in US politics increasing. Kamala Harris is the first female vice-president, the highest-ranking woman in the US government so far. This has also materialised in the increased importance of feminist tendencies and ideas. For Europe, it is an opportunity to find an ally in international organisations on gender policy and important gender-related issues in the 2030 Agenda.
  • A fifth trend is the shift on the environment and climate change, giving high priority to a green and sustainable transition. The US's return to the Paris Agreement and the cancellation of the Keystone XL pipeline exemplify this shift in trend and the intentions of the new administration. With regard to the green transition, this is expected to materialise through the "American Jobs Plan". For the EU and its Green Deal, it is an opportunity to have a development race with the US and to put pressure on member states to optimise the use of Next Generation EU funds to the maximum.
  • The sixth trend analysed is the technological awakening of the US with respect to its battle with China, which in recent years had established itself as the world's technological giant. As in the previous trend, Europe should take advantage of the impetus provided by an ally like the United States in this area and move towards its own technological revolution.
  • A seventh trend is a greater government intervention in controlling and monitoring the publication and dissemination of fake news, which was previously promoted by Donald Trump as a strategy to entrench his power and establish certain narratives in society. The assault on Capitol Hill and the suspension of the former president's social media accounts as a result have convinced the new government of the need to create new laws to force greater moderation of online content.
  • An eighth trend in trade is the relaxation of US protectionism vis-à-vis Europe, while it has tightened further vis-à-vis China in an attempt to restore US manufacturing to a prominent position in global trade chains. It is a key part of reconnecting with a middle class totally detached from party, government and politics.
  • Finally, a ninth trend is the US return to multilateralism, and the European response in the form of 'open strategic autonomy'. Relations with Europe are being reconfigured, taking a more cooperative turn in many areas and fora - the UN, the G7, the G20, NATO, the WHO - although in other areas differences remain to be managed: on digital issues, trade, or strategy vis-à-vis China and Russia. This trend coincides with a process of reflection underway in the EU to define its role as a region in terms of global governance. The successful fit of the US and the EU in a new multilateral environment cannot be taken for granted; it will depend both on US perseverance (in the face of possible electoral swings in 2024) and on Europe's internal capacity to agree on common positions and a clear direction.

Vicente Palacio, Director of Foreign Policy at the Alternativas Foundation/The Diplomat