US contends with foreign policy restraints

Foreign policy issues rarely headline US presidential elections, but the rest of the planet has a vested interest in the decision of US voters in November whether to re-elect President Joe Biden or to return his predecessor Donald Trump to office.

Ideological differences between the two candidates are obvious and, at least in the case of Biden, the policy positions are clear enough to outline a possible course on global affairs in 2025-29. Trump's possible actions in the same period are harder to pin down — his promise to make America as great as he says it was during his presidency is characteristically inexact, and there are many competing proposals expressed by his former and would-be foreign policy advisers.

But there are challenges that will confound either Biden or Trump, especially on issues in which the differences between the two presidencies were more stylistic than substantive, such as Iran sanctions and confrontation with China. Foreign policy decisions made by Trump have constrained Biden's room for manoeuvre in the Middle East and other regions. Biden's legacy — support for Ukraine, Indo-Pacific alliances and "friend-shoring" — may likewise prove hard to undo without causing direct harm to US interests. Both have encountered limits to US power during their term in office, despite the country's overwhelming military and financial edge. And any occupant of the White House would have to contend with a world that has evolved in many complex ways in the past decade.

The Middle East is one area where both presidents have tried and failed to dial down US presence. Biden's administration continued its predecessor's course of advancing the normalisation of Israel's relations with Mideast Gulf states, only to find itself thrust into a position of advocating a two-state solution to the Israel-Palestine conflict in the wake of the military operation in Gaza. Tehran has shrugged off both Trump's "maximum pressure" campaign and Biden's bid for renewing the Iran nuclear deal, by finding ways to bypass US sanctions under the auspices of China, the buyer of last resort for Iranian and other sanctioned crude.

No exit

Trump's unilateral exit from the JCPOA nuclear deal has proven consequential for the wider Middle East. With no deal to constrain its nuclear programme, Tehran's theoretical capacity to produce nuclear weapons is matched by demonstrated ballistic ability to deliver large payloads across the entire region. "I expect that Iran's nuclear programme is going to thrust itself back into the headlines" soon, says Johns Hopkins University professor Adam Szubin, a former top US sanctions enforcer. An informal US-Iran deal to delay Tehran's progress on the nuclear front is being tested daily in the wake of the Gaza conflict, as the US and Iran-backed militants in Syria, Iraq and Yemen are exchanging fire.

The one big change since the Trump presidency is a detente between Tehran and its erstwhile Mideast Gulf rivals. Riyadh and Abu Dhabi encouraged Trump to confront Iran in 2017-18. They are now urging Biden to tread carefully in Yemen as the US tries to curb the Houthi threat to Red Sea shipping. Trump's transactional approach to foreign policy may have initially appealed to the Gulf Arab powers, but the US turned out to be an unreliable partner — Trump did not intervene after an Iranian attack in September 2019 on Saudi state-run Aramco's key Abqaiq oil hub.

Saudi Arabia is now pushing for more formal security guarantees from the US — a prospect that seems possible to accomplish under Biden, even if tied to broader Middle East issues such as regional economic integration and addressing the Palestinian dilemma. The Biden administration's approach to managing global oil markets has turned out to be more nimble than its predecessor's, with the additional benefit of divorcing relations with Opec from the US-Saudi geopolitical agenda. Trump, once in office, could undo all that, but there is no alternative that would satisfy Riyadh's current security and economic priorities.

The Biden administration's current thinking on Iran remains reliant on de-escalation of tensions, including by addressing Gaza and other Middle East conflicts. Former Trump administration officials are arguing for a more muscular approach to Iran, and for putting more economic pressure on China to stop importing Iranian crude. Trump himself shows little willingness to confront Iran militarily. But the prospect of greater economic pressure against Iran and China is one issue in which Trump and his advisers seem to have ideas in common.

The great helmsmen

US-China relations are stable following a recent summit between Biden and Chinese president Xi Jinping, but "it's a brief upside in a relationship that is in a controlled, steady downward decline", research firm Amundi Investment Institute's head of geopolitics, Anna Rosenberg, says. The Biden administration has ruled out a complete decoupling of the US and Chinese economies, but it is imposing trade restrictions in the semi-conductor, renewable energy and electric vehicle sectors.

Biden's policy of fragmenting global markets to secure the supply of critical minerals and processing technology for renewable energy continues efforts that started under Trump, even though the current White House looks at that through the decarbonisation lens. A second Trump administration "will probably be much more broad-based in terms of trade restrictions", Rosenberg says.

Evasion of Iran sanctions already demonstrates the limits of the US' economic pressure toolkit. Chinese importers' ability to avoid reliance on US dollars leaves Washington little choice — retaliating with sanctions against major Chinese banks and companies would affect the US and global economy as well.

The same dynamic is likely to play out in a hypothetical scenario of responding to China's more assertive posture against Taiwan, whether by military or economic means, Szubin says. "The US response is not going to be Russia-style sanctions that go after the central bank, that cut off the largest banks from the US dollar," he says. Even in the case of Russia, the financial constraint effect of western sanctions turned out to be less than expected. "If China was able to build and promote the alternative, non-dollar-based financial system, then financial sanctions against China probably would not be as powerful or effective," US Council on Foreign Relations fellow Zoe Liu says.

Biden and Trump's greatest differences are perhaps on the value of US alliances and Ukraine, and the possibility of Trump's return to office has already galvanised European countries to devote greater resources to defence spending. "If a [potential] US president doesn't want to defend its allies, that's all it takes — that threat in itself is big enough to cause a change in action," Rosenberg says. A notional deal to end fighting in Ukraine within a day of taking office may or may not be a serious pledge by Trump, but it assumes that Ukraine and its EU allies will play along and that Russian president Vladimir Putin is willing to negotiate.

The US disengagement from the Middle East has led to regional powers patching up relations and looking for new alliances in recent years. Erratic actions on the wider global stage likewise would prompt US allies to look for alternatives. A Trump-imposed compromise in Ukraine could lead to similar deals by erstwhile US allies, such as finding accommodation with China on energy transition technologies. It may be a feeble guarantee against drastic steps by Washington, but partners will be hoping it is harder to unwind the individual elements of a US alliance combining security, energy and finance.

By Haik Gugarats