Biden should retain Office of Trade and Manufacturing Policy

Biden should retain Office of Trade and Manufacturing Policy

During the 2020 presidential campaign, Joe Biden pledged to revitalize the U.S. economy and “Build Back Better.” This included key campaign goals to create one million new U.S. auto industry jobs, expand "Buy America" rules for federal spending and establish a “Made in America” section in the Office of Management and Budget. 

These are important goals. But to make them work, the new Biden administration will need to coordinate a whole-of-government effort — and ensure that it is supervised at the White House level. Doing so will require that the current Office of Trade and Manufacturing Policy (OTMP) be maintained, with a strong director chosen to oversee all of the interagency efforts necessary to rebuild America’s industrial base. This new head of the OTMP should report directly to the president.

The OTMP was launched by President TrumpDonald TrumpOvernight Defense & National Security — The Pentagon's deadly mistake Overnight Energy & Environment — Presented by Climate Power — Interior returns BLM HQ to Washington France pulls ambassadors to US, Australia in protest of submarine deal MORE in April 2017, with economist Peter Navarro named as director. While President-elect BidenJoe BidenHouse Democrat threatens to vote against party's spending bill if HBCUs don't get more federal aid Overnight Defense & National Security — The Pentagon's deadly mistake Haitians stuck in Texas extend Biden's immigration woes MORE may not wish to replicate the precedents of the Trump administration, there is simply no other White House-level agency that can dedicate itself to the trade and industrial strategies Biden has envisioned in his “Build Back Better” plan. Eliminating OTMP, or reducing its stature, risks sending the wrong signal inside and outside of the executive branch. 


The situation confronting the nation’s manufacturers is serious. Beijing’s Made in China 2025 plan already aims to dominate the industries of the future. And at the same time, America’s goods trade deficit has climbed to staggering proportions — including a massive $854 billion deficit in 2019 alone. Crucial supply chains have moved offshore, taking with them critical production capacity and good-paying jobs. And as the Coalition for a Prosperous America’s Reshoring Index has reported, America’s goods producers have lost market share at home for more than 20 years.

There’s a massive task waiting for the Biden administration — to pull together supply chain reshoring, infrastructure investment, tariffs and currency policy. Notably, these kinds of trade and industrial strategies are outside the purview of longstanding offices like the National Economic Council (NEC) and the Council of Economic Advisers (CEA). Both are too focused on macroeconomics and the financial sector, and often hostile to aggressive trade action. 

The OTMP must become the new hub for reshoring, and oversee policies on Buy America rules, government procurement, industrial loan programs, the Defense Production Act and exchange rate misalignment. This would be a welcome shift from past White House economic advisers who were predisposed to Wall Street — and lacked the fortitude to tackle America’s overvalued dollar, among other trade challenges.

If the Biden administration is to succeed in rescuing America’s economy from the devastating impacts of the COVID-19 pandemic, manufacturing must come first. No other part of the economy matters as much when it comes to creating good-paying jobs. It’s estimated that each manufacturing job supports roughly seven other jobs throughout the economy. And as the U.S. trade representative has projected, every $1 billion of U.S. goods trade deficit costs 6,000 domestic jobs. When one considers that America’s trade deficit now runs to hundreds of billions of dollars annually, it’s clear that a vast number of jobs are being left on the table. It’s why the nation absolutely must get trade right. 

There are some key policies the new administration will need to pursue in order to revive manufacturing. For example, Biden’s Buy America goal – which would award government contracts only to domestic manufacturers – could increase the job creation of infrastructure investment by roughly one-third. Similarly, new electric vehicle production in the U.S. will require Biden to establish productive capacity at home while continuing the tariffs that target China’s piracy, hacking and forced technology transfer. And to make U.S. exports more competitive, Biden will need to work with the Treasury Department and Congress to lower the price of America’s overvalued dollar. 

There are endless challenges that need to be surmounted. And they will require multi-agency action coordinated by a senior adviser experienced in modern industrial strategy and possessing sufficient staff resources as well as regular access to the Oval Office. The Biden administration should maintain and strengthen the Office of Trade and Manufacturing Policy (OTMP). America’s producers need an empowered West Wing advocate to wrangle whole-of-government efforts for manufacturing, particularly as we Build Back Better after a pandemic-enforced recession. 

Michael Stumo is CEO of the Coalition for a Prosperous America. Follow him on Twitter @michael_stumo.