The Price of Nostalgia
America’s Self-Defeating Economic Retreat
U.S. President Joe Biden has ambitious goals both at home and abroad. On the home front, he promises to “build back better” through enormous investments in COVID-19 pandemic recovery, health care, education, infrastructure, and green technology. Beyond U.S. shores, he is scrapping former President Donald Trump’s “America first” approach to statecraft and returning the United States to the global stage: “America” he says, “is back . . . ready to lead the world, not retreat from it.”
But Biden cannot have it all, and he would be wise not to overpromise. With the country’s economy and politics in tatters, the new administration must remain laser focused on domestic renewal, a priority that will inevitably come at the expense of the nation’s efforts abroad. The last four years were a near-death experience for American democracy. If Biden is to ensure that Trumpism was little more than a dark detour, his administration must address the economic discontent that spawned Trump’s angry politics of grievance. The nation is suffering on a scale not experienced since the 1930s. A new New Deal is unquestionably in order.
Ensuring that domestic priorities remain front and center will not be easy. Time and again since 1941, the world has drawn the United States into far-flung commitments from which the country has had difficulty extracting itself. Former President Barack Obama and Trump both attempted to end the “forever wars” they inherited, but U.S. troops are still in Afghanistan and Iraq. At the same time, Washington cannot turn its back on the outside world—as it did during the 1930s. President Franklin Roosevelt shunned foreign entanglement to focus on his domestic agenda, allowing Nazi Germany and imperial Japan to carve up Europe and Asia. Biden cannot afford to repeat that mistake. In an irretrievably interdependent world buffeted by China’s rise and Russia’s troublemaking, an isolationist retreat is not an option.
Biden must therefore strike a delicate balance. His foreign policy must be sufficiently ambitious to secure U.S. interests abroad but also sufficiently restrained to enjoy popular support and remain in sync with his domestic priorities. But first things first: Biden’s administration must spend time, political capital, and lots of money on domestic renewal. In the long term, this investment at home will strengthen the United States abroad. But in the short term, Biden will face powerful limits on his foreign policy—limits he would be wise to forthrightly acknowledge. America may be back and ready to lead the world, but only insofar as domestic and international constraints will permit. Better for Biden to aim at realistic objectives and deliver than aim high, fall short, and lose the confidence of the American public and U.S. allies alike.
The most formidable constraint on Biden’s foreign policy is domestic politics. Trump may have been a hapless statesman, but he correctly sensed that a sizable portion of the U.S. electorate had grown weary of seemingly unlimited foreign entanglements. Many Americans believe that Washington devotes too many resources to solving the problems of other nations and not enough to solving its own. It has pursued too many wars, too much free trade and immigration, and too many costly alliances and international pacts that, in Trump’s words, “tie us up and bring America down.” Biden needs to remain mindful of the nation’s inward turn if he is to maintain his political strength, keep hold of Congress in the 2022 midterms, and sustain the domestic investments needed to tame the discontent that led to Trump’s rise.
Biden seems to realize as much, asserting in a February 4 speech that “there’s no longer a bright line between foreign and domestic policy. Every action we take in our conduct abroad, we must take with American working families in mind. Advancing a foreign policy for the middle class demands urgent focus on our domestic economic renewal.” Still, there will be tough choices in the months ahead.
Although most Americans welcome the return of a president who stands up for human rights and democratic allies, public support for an ambitious and expensive foreign policy will be much harder to come by. A recent survey showed that around three-quarters of the U.S. electorate favor a withdrawal from Afghanistan and Iraq, and roughly half want the country to be less engaged militarily around the world. Another poll revealed that a majority of Americans believe the two main threats to the nation come from within: the pandemic and domestic violent extremism. Among Democrats, the top five perceived dangers for the United States are the pandemic, climate change, racial inequality, foreign interference in U.S. elections, and economic inequity at home. Younger Americans, a key demographic for Biden, care much more about climate change and human rights than they do about traditional security issues. Geopolitical threats no longer occupy the American mind as they once did.
Attitudes toward free trade have undergone a similar shift. Until recently, trade liberalization was a key plank of Pax Americana. Open markets were supposed to fuel rising prosperity at home and abroad, and the ascent of contented middle classes would presumably advance democratization, including in China and Russia. Now, free trade is a dirty word for Democrats and Republicans alike. Although large companies benefited handsomely, too many Americans feel left behind, not enriched, by globalization. They want trade deals that are more favorable to U.S. workers. And commercial liberalization failed to deliver the projected geopolitical benefits: China’s booming foreign trade fueled its stunning economic ascent, but that rise has been accompanied by political tightening, not an opening.
Ensuring that domestic priorities remain front and center will not be easy.
Biden may decide to eliminate some of Trump’s protective tariffs, particularly on U.S. allies, but there is little public appetite for making market liberalization a mainstay of U.S. statecraft once again. Indeed, Biden faces considerable pressure from the progressive wing of his own party to be tough on trade. As Senator Elizabeth Warren, a Democrat from Massachusetts, put it during the presidential campaign, Washington’s trade policy “works for giant multinational corporations and not for much of anyone else.”
So far, Biden seems to have accepted his limited maneuverability on this issue. His biggest trade initiative to date is a “Buy American” executive order directing the federal government “to maximize the use of goods, products, and materials produced in, and services offered in, the United States” and thereby ensure that “the future is ‘made in all of America’ by all of America’s workers.” And in an effort to halt U.S. job losses due to import competition with China, Biden has also pledged to marshal a united front of major economies to confront Beijing’s unfair trade practices.
Biden will be similarly constrained when it comes to recommitting the United States to institutionalized multilateralism. He is right to ditch Trump’s strident unilateralism and restore Washington’s traditional role as a team player. But the treaty-based international architecture put in place in the mid-twentieth century is outdated. The U.S.-centered alliance network no longer has the geopolitical heft it once did, the United Nations and other bodies are increasingly dominated by China, and the permanent members of the UN Security Council represent the world of 1945, not 2021. Existing international institutions are also poorly designed to deal with current global challenges, such as climate change, global health, and cybersecurity.
Biden may want to refurbish this fraying architecture, but the United States lacks the bipartisan politics needed for a new round of institutionalized order building. Even if Democrats remain avid supporters of international teamwork, Trump spoke for most of his fellow Republicans when he proclaimed that “we will no longer surrender this country or its people to the false song of globalism.” As a result, the Senate is unlikely to approve new treaty-based arrangements, and Biden, like Obama, will have to rely on executive actions and informal agreements such as the Paris climate accord and the Iran nuclear deal.
Such deals are certainly better than nothing, but executive orders are vulnerable to changes of power in Washington—leaving allies and adversaries alike skeptical of U.S. reliability. Accordingly, Biden must carefully choose the pacts he pursues and work particularly hard to secure popular support for them. Public backing can sustain Biden’s return to multilateralism and help preserve the deals that his administration strikes, should Republicans return to power.
Biden also faces economic constraints on foreign policy. The proposed $1.9 trillion pandemic relief package, along with the $900 billion approved by Congress in December, represents, according to former U.S. Treasury Secretary Larry Summers, “the boldest act of macroeconomic stabilization policy in U.S. history.” It is a drop in the bucket, however, compared to what Biden envisages for the next four years.
The nonpartisan, nonprofit Committee for a Responsible Federal Budget estimates that the administration is poised to pour over $11 trillion into infrastructure, green technology, childcare and education, health and long-term care, social security and social welfare, and other domestic investments. Even with the added revenue from planned tax reform (and not including any further pandemic relief packages), these programs will add up to $8 trillion to U.S. debt over the coming ten years—potentially harming long-term growth.
For now, deficit spending makes sense to get the economy back on its feet. But domestic expenditures on the scale envisaged will cut into the resources available for tasks abroad. It is a tall order to justify further stabilization efforts in Afghanistan amid an economic crisis at home and over 500,000 Americans dead from COVID-19—a death toll well beyond that from any of the nation’s foreign wars. Even if the roughly $750 billion defense budget stays more or less intact, the days of spending some $6 trillion on “forever wars” in the Middle East are long gone. Biden’s priority should therefore be to lighten the nation’s military burdens abroad and convince allies to pick up the geopolitical slack. Although his administration may adjust the timeline, Biden should continue Trump’s effort to withdraw U.S. troops from Afghanistan, Iraq, and Syria and downsize the United States’ military footprint in the Middle East.
Avoiding unnecessary interventions and scaling back military commitments in peripheral conflicts will help Biden sustain a robust military presence where it matters most: namely, in Europe and the Asia-Pacific, where checking Russian and Chinese ambition remains a vital U.S. interest. Assuming Biden can convince allies to shoulder heavier defense burdens, he should be able to reconcile these core obligations with the need for more domestic investment.
Finally, Biden’s foreign policy faces potent international constraints. However hard he works to deliver on his promise that the United States is again “ready to lead the world,” Biden will confront a world that is less ready to be led than it once was. China will have the world’s largest economy by the end of the decade, and its Belt and Road Initiative, an enormous global infrastructure investment program, is rapidly spreading Beijing’s influence.
Moscow, for its part, has already formed a quasi alliance with Beijing to expedite the diminution of Washington’s influence. Russia longs for a multipolar world that will check the United States. Its military interventions in Georgia, Ukraine, Nagorno-Karabakh, and the Middle East all aim to further that objective. An illiberal Turkey is also getting in on the action, sending troops and mercenaries into the Caucasus, Libya, and Syria and facing off with Greece over gas exploration and maritime boundaries in the eastern Mediterranean.
Biden has pledged to stand up for democratic ideals at home and abroad, but the growing influence of illiberal powers means that his administration will need to tread carefully, even as it denounces violations of political freedoms and human rights. Many of Biden’s international priorities, including combating climate change, reining in North Korea’s nuclear ambitions, and advancing global health, necessitate working with Beijing and other governments that are hardly champions of democracy. Washington will need Moscow’s cooperation if it wants to avoid a new nuclear arms race and restore Ukraine’s sovereignty. Turkish President Recep Tayyip Erdogan is a tough customer who has compromised Turkish democracy, but looking to Ankara is one of Biden’s only options when it comes to stabilizing a troubled neighborhood. Although Biden should take a firm stand against political repression, tackling global problems will require pragmatic give-and-take.
Only if the United States gets its own house in order will it have the wherewithal to lead beyond its shores.
Even the United States’ traditional democratic allies won’t relish returning to their former roles as junior partners. French President Emmanuel Macron is currently touting the need for Europe to acquire so-called strategic autonomy and prevent a “Chinese-American duopoly.” German Defense Minister Annegret Kramp-Karrenbauer may choose her words more carefully, but she too wants Europe “to be able to act independently” and “be a strong partner for the United States on an equal footing and not a protégé in need of help.” As if to drive the point home, the European Union concluded an investment treaty with China just before Biden took office—despite a request from his team to hold off. The United States had better get used to not getting its way as often as it might like.
Biden should seek to manage these international constraints through a straightforward bargain. Washington should offer other countries more influence in exchange for their readiness to shoulder additional responsibility. If Beijing wants Washington to give it a wider berth, it should do more to provide global public goods—for example, increasing Chinese contributions to peacekeeping, postconflict reconstruction, and global health efforts. If Europe wants to be an equal partner, then it needs to acquire more military capability and geopolitical heft. The United States can and should step back if and when others are prepared to step up.
After Trump and the COVID-19 pandemic, Biden has no choice but to concentrate his presidency on domestic renewal. Repairs at home are essential not just for preventing a return to the angry and self-destructive illiberalism of the last four years but for rebuilding the political foundations of steady U.S. statecraft. Only if the United States gets its own house in order will it have the political and economic wherewithal to provide purposeful leadership beyond its shores.
The demands of renewal at home require that Biden be forthright with the American people about the powerful domestic and international constraints he faces on foreign policy. After Trump’s trashing of U.S. credibility and his willful divorce of rhetoric from reality, truth in advertising will be vital to restoring trust in the U.S. presidency, both in the United States and around the world. Washington should still lead, but with a lighter touch that reflects the profound changes that have transpired at home and abroad since the United States arrived on the global stage during the 1940s. In the years after World War II, the U.S. economy was singularly dominant and its international engagement rested on bipartisan agreement. Today, the United States contributes less than 25 percent of global GDP, and Democrats and Republicans share almost no common ground on either domestic or foreign policy.
As Biden embarks on an urgent effort to repair the nation, he is right to reject much of Trump’s errant statecraft—reorienting U.S. foreign policy toward international teamwork, diplomatic reengagement, and the defense of the nation’s core democratic principles. But Biden must not throw out the baby with the bathwater. Instead, he should continue Trump’s effort to rectify the overmilitarization of U.S. engagement abroad, trim the nation’s foreign commitments, choose its fights more carefully, and press allies to do much more. The justifiable ambition of Biden’s domestic agenda needs to be matched with judicious modesty in his foreign policy. That’s the formula for “building back better,” both at home and abroad.