Domestic politics and international trade spats have disproportionately challenged the global supply chain for electric storage, according to one expert on the geopolitical scope of the energy storage market, and these challenges are likely to persist, albeit somewhat moderated, even if there is a change in the White House.
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Electric storage is among industries that have been heavily impacted by import restraints, including antidumping and countervailing duty measures and trade tariffs, used with increasing intensification by President Donald Trump, Bernd Janzen, a partner at Akin Gump Strauss Hauer & Feld, said at the Energy Storage Association's annual conference.
"If you look at the homepage of the ESA website, what you see is basically a collection of commodities and manufactured goods that would be at the top of any trade lawyer's list of what is most strongly impacted by US trade remedy law today," he told conference attendees. This exposure to trade risks has created great uncertainty for US importers in these industries and raised costs, he said.
While there is much hope and even a strong expectation in certain circles that former Vice President Joe Biden, if he wins the presidential elections in November, would seek to reverse much of Trump's trade policy, it is far more likely that "we would see only maybe a modest reversal of what we have seen this administration do and certainly no general return to the old normal," said Janzen, who has practiced in the field of import regulation and trade remedy law for the past 25 years.
The "old normal" he spoke of was relatively friendly to US importers as, on balance, there was an emphasis on increased liberalization, lifting barriers to trade and global harmonization with order and predictability instilled by the US-supported World Trade Organization. That approach carried with it the general expectation that an embrace of China into the global trading system would bend that country's practices more toward Western and WTO-based norms, he said.
Among the factors that contributed to the breakdown of the old normal with regard to trade policy was the shuttering of large industrial facilities along the Rust Belt that left thousands of workers unemployed in political swing states. And the views of those displaced workers have carried significant "political weight in our current political order," Janzen said.
He also noted growing distrust and discord with the WTO as well as a steady progression that has dramatically intensified under the Trump administration of leaning "heavily on various trade remedies to basically curb import competition."
Further, "the prevailing view is that China is actively and aggressively pursuing a set of trading norms with its own allies that is functioning increasingly as a counterweight to the US designed and led WTO-based multilateral model," Janzen said.
Under the new normal, Trump resurrected "zombie statutes" to carry out his vision on trade, which Janzen said has taken a protectionist or even isolationist tone.
Those zombie statutes "had basically become dead letters under US law and now they are very much walking again, and creating terror for those who are importing goods that are made more costly by them," Janzen said.
In particular, he was referencing Section 232 of the Trade Expansion Act of 1962, the source of authority behind the national security tariffs on steel and aluminum, and Section 301 of the Trade Act of 1974, the statutory authority being used to impose duties on imports originating in China.
Janzen asserted that a return to the old normal "has probably become politically unfeasible at any rate in the US, given what is going on, particularly in the swing states of Pennsylvania and Wisconsin, where there are many voters and basically a bipartisan consensus that the old trade rules are not working and certainly do not serve those communities well."
He noted that the Biden campaign has been eager to point out perceived failures in Trump's handling of the China trade deal and push rhetoric asserting tough enforcement of US trade laws.
"That's basically code for: US [antidumping and countervailing duty measures] enforcement will continue along the current lines [and] the use of Section 232 for steel and aluminum will probably also continue much along the current lines," Janzen contended.
He offered that he did expect some easing in the tone toward China.
"I think the current pugilistic attitude that we're seeing from this administration is unlikely to be pursued in the same manner by a Biden administration, but I think, to a significant degree, we will still see some pressure on China," he said.
"While a Biden administration might not use terms like disengagement or disassociation, I do think we will see a critical and arm's length approach that will likely still manifest itself in a certain degree of enthusiasm — albeit maybe a little bit less — for import restraints," Janzen said.
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