ZEW President Achim Wambach on the Outcome of the US Presidential Election

Joe Biden was elected the 46th president of the United States. Professor Achim Wambach, president of ZEW Mannheim, comments on this matter:

“With Joe Biden, the US will have a reliable candidate in the White House, who will return to international agreements. This is a great opportunity for Europe and the European economy.

According to Walter Eucken, a pioneer in the area of the social market economy, pursuing an economic policy that is both predictable and consistent is one of seven constitutive principles of economic systems. However, the aspect of reliability has sadly been lacking in these past years under the Trump administration. The expectation is therefore that Joe Biden’s victory puts an end to the erratic course that has shaped US economic policy-making – in particular in the area of foreign policy – in the past four years. This will spur investments in the United States. However, it must be noted that the slogan ‘America First’ and the stance towards certain protectionist tendencies in trade policy are by no means unique features of the Trump administration. With his slogan ‘Made in America’, Biden follows the same political direction. Following this line, Biden has made no commitment to restart negotiations for a trade agreement between the US and the EU during his presidency.

For international climate policy, on the other hand, Joe Biden’s victory is a positive sign. Joe Biden has announced to rejoin the Paris Agreement. The alliance between the US and Europe will be key to the success of climate policy goals. In this regard, the past four years have been wasted. Concerning trade disputes with China, Biden will most likely seek stronger cooperation with actors like the EU. The EU should take this opportunity to push for strengthening the World Trade Organization. We need joint action in order to create fair conditions of competition in the three major economic areas of the world – the US, China and the European Single Market.”