Second-Term Scenarios: The Economic Tools Shaping Foreign Policy and Geopolitics Under Biden or Trump | Brunswick Group

Second-Term Scenarios: The Economic Tools Shaping Foreign Policy and Geopolitics Under Biden or Trump

Given the breadth and depth of the geopolitical challenges facing industries around the world, the stakes have never been higher for businesses.

President Joe Biden and former President Donald Trump are both animated by political bases that are increasingly populist and protectionist, though each candidate has a different approach to navigating the current geopolitical landscape. Economic tools – including tariffs and export controls – will feature prominently in either administration and corporate leaders must be prepared for coming developments.


While foreign policy historically has not been a primary driver of U.S. presidential elections, today’s complex geopolitical environment raises issues that impact large parts of the electorate and could have broad repercussions for the election and for future policy.  The table below summarizes key differences in the foreign policy approaches that would be featured in a second Biden or Trump term.

Trade policy

Neither candidate is likely to pursue comprehensive new free-trade agreements.

Trump will likely maintain his protectionist stance toward global trade and American industry and has promised a 10% tariff on all imported goods (and a 60% tariff on goods from China) on the campaign trail. To the degree that Trump pursues trade deals, they will be bilateral efforts.

Biden can be expected to use tariffs and other trade levers to reshore key industries and protect domestic production of semiconductors and green technologies, including electric vehicles, to facilitate the green transition through the provisions of the Inflation Reduction Act (IRA).

Both candidates are likely to expand on these policies in a second term to bolster the growth of key domestic industries in the name of national security and supply chain resilience.

Takeaway for business: Biden and Trump both include controlling access to the U.S. market as a central element of national security. A reversal of the protectionist turn in U.S. trade policy in recent years is unlikely with either candidate.

Business leaders should take the following steps to prepare:

  1. Expect additional tariffs, protectionist rhetoric, and potential new trade barriers.

  2. Identify whether their sector is likely to raise national security concerns now or in the future (thereby becoming a target of U.S. government action).

  3. Evaluate the degree of geopolitical and policy risk in their supply chains and customer bases.

China: trade, export controls, and investment screening

As election season intensifies, both contenders are adopting more hawkish positions on China. Such stances may increase economic strains and undermine the recent stabilization in bilateral relations.

Biden has increased efforts to improve diplomatic dialogue and engagement with China, but in the realm of economic and commercial policy, strategic competition with China will define the remainder of his first term and likely feature prominently if he is reelected. Tightening restrictions on China’s access to advanced semiconductors and similar cutting-edge technologies would remain a point of contention during a second Biden administration, and he would likely maintain and potentially expand restrictions as dual-use technologies develop.

Trump has shown a willingness to utilize blunt tools to separate the U.S. economy from overreliance on Chinese markets and is more likely to push for America to strategically decouple from China. His focus on even higher tariffs on China reflects this point of view. Trump would continue the Biden policies of restricting Chinese access to advanced technologies, and both administrations would likely step up screening of inbound investments, particularly from China.

Takeaway for business: No matter who wins in November, business leaders should expect greater scrutiny of investment capital flows into and out of China, and a more aggressive regulatory and legislative approach to technology transfers. Industries that may not have traditionally been in policymakers’ crosshairs, such as healthcare, will increasingly see scrutiny of their business dealings and relationships in China. Businesses operating in China, or with supply chains connected to China, need to develop contingency plans in the event of retaliatory trade action from China aimed at U.S. companies.

Europe: trade and reshoring of key industries 

Industrial strategies and reshoring policies, widely supported by both Biden and Trump, will continue to cause tension between Washington and Brussels.

Biden is likely to continue talks to reach an agreement on critical minerals with European partners that expressed frustration with the Inflation Reduction Act. Trump could be inclined to strip certain provisions from the IRA legislation, while maintaining subsidies and support for U.S. manufacturing industries, including the automotive sector, which is the primary area of concern for European member states.

While Biden has halted the steel tariffs that Trump implemented in 2018, they remain a point of contention because the U.S. did not completely abolish them. Trump could potentially reimpose these tariffs, which could provoke the EU to retaliate against U.S. consumer goods.

Trump also may be inclined to put pressure on the EU to pursue further measures to decouple from the Chinese economy, and the EU may be caught in the middle of a heightened U.S.-China trade conflict.

Takeaway for business: Industrial policy will be a defining feature of the U.S.-EU commercial and investment relationship over the next several years. U.S. allies have responded to the major industrial policies promoted during the Biden administration with similar policies, as demonstrated by the European Chips Act and European Green Deal. Business leaders need to closely monitor and anticipate policy developments in these areas, as they will play a large role in channeling investment flows and creating new opportunities across a range of sectors.

Mexico: North American trade

One of the key issues on the U.S.-Mexico agenda is the renewal of the USMCA trade agreement, set to take place in July 2026. China will be the major issue in USMCA renegotiations. Mexico has benefited from rising U.S.-China tensions as companies shift to diversify their supply chains. Biden has sought to ensure that Mexican operations aren’t used by Chinese firms to enter the U.S. market without triggering tariffs and other restrictions they would otherwise encounter. His administration has encouraged Mexico to levy tariffs on a large set of Chinese goods, and the two countries launched a working group to coordinate foreign investment screenings and strengthen collective security late last year. Trump will pursue a similar approach but might more forcefully link it to other issues like immigration and border security.

The IRA is another touchpoint. Mexico benefits from subsidies on critical minerals and on manufacturing and assembly of electric vehicles. That would continue under a second Biden administration, but a second Trump administration could reduce or end those subsidies, with big implications for the North American EV industry.

Immigration policy will remain a major political issue for both Biden and Trump. Mexico in recent years has been a willing partner to address the issue, but domestic politics there may limit Mexican President-elect Claudia Sheinbaum’s ability to do much more. Under a Trump administration, the U.S. approach may turn more combative, with far more willingness to link Mexico’s ability to reduce migrant flows to punitive trade and investment measures.

Takeaway for business: The U.S.-Mexico economic relationship poses two primary challenges for business leaders: uncertainties around trade and immigration policy. USMCA renewal will come into sharper focus by the middle of next year and could create uncertainty in supply chains and volatility in markets – with potentially large implications for the auto industry.

You can download a copy of this note here

What comes next

Both Biden and Trump would actively use economic, trade, and commercial policy levers in pursuit of broader geopolitical objectives, increasingly making companies an instrument of statecraft. Business leaders, therefore, must stand ready to comply with evolving rules and prepare for the disruption they may bring. Tactically, this also means that companies must continuously monitor political developments directly relevant to their business and to their entire supply chain.

Businesses that most successfully adapt to these new geopolitical and economic policy realities will deploy nuanced communication and stakeholder engagement strategies that reflect a careful understanding of the political, regulatory, and geopolitical landscape. The ability to make swift tactical and strategic adjustments now depends on the reliable interpretation of emerging political developments, whether in Washington, Beijing, or Brussels. Corporate leaders also need to communicate effectively about their plans to a range of internal and external stakeholders, including employees, boards, investors, customers, media, and regulators.

For more information or to continue the conversation, please contact the Brunswick Group’s U.S. Public Affairs, Policy & Regulatory Practice or Geopolitical Practice.  

Download (246 KB)