Photo: Reuters/Joshua Roberts
US Treasury Secretary Janet Yellen has voiced support for the Biden administration's call for a global minimum tax rate. Photo: Reuters / Joshua Roberts

Donald Trump’s decision to oppose the result of the 2020 presidential election is pushing President-elect Joe Biden to the right and in effect preventing his incoming administration from making a clean break from many of Trump’s unheralded economic and foreign-policy successes.

While the US and global news media continue to ridicule former New York mayor Rudy Giuliani’s attempts to overturn the election as a circus, the legal battles undertaken by Trump’s personal lawyer serve to highlight Biden’s razor-thin margin of victory (less than 1%) in key battleground states and the US electorate’s demand for a middle-of-the-road government.

Biden has already demonstrated that he will not be pushed to follow a radical-left economic agenda by the likes of Senator Elizabeth Warren and far-left firebrand Representative Alexandria Ocasio-Cortez, by naming former US Federal Reserve chairwoman Janet Yellen as treasury secretary.

Considered by all as a safe pair of hands, Yellen is expected to persuade Biden not to derail Trump’s V-shaped economic recovery during the Covid-19 crisis. The Biden administration would do well by maintaining the job-creating flat tax for small and minority-owned businesses and avoid redirecting Covid-19 stimulus funds to non-productive social-welfare payments and unsustainable investment in renewable energy.

In fact, Biden can sustain domestic growth by implementing Trump’s proposed $1.5 trillion infrastructure plan to create thousands of new jobs and lower debt levels in urban America through the mass privatizations of airports, utilities and highways.

Masayoshi Son, the founder and chief executive of Japan’s SoftBank, told The New York Times’ DealBook last week that he accumulated more than $80 billion in cash ahead of a dire prediction of a severe market crash in the coming months triggered by a Lehman Brothers-like failure stemming from an inevitable economic slowdown from new Covid-19 lockdowns in Europe and the US.

If the US Senate remains in Republican hands, Biden not only will be forced to abandon his agenda for massive tax hikes but also to work with Congress to make politically painful structural reforms to social security and Medicare (raising age requirements) already being lobbied for by Nebraska’s doom-and-gloom Republican senator, Ben Sasse.

Even as global markets celebrate the apparent lack of radical change in Biden’s economic policies, foreign affairs can easily create catastrophic failure for the nascent administration as it tackles unprecedented geopolitical instability around the world marked by an emboldened Iran, a weakened Russian Federation and a militarily belligerent China.

Biden could exploit a seemingly off-the-wall proposal by US Attorney General William Barr calling for the creation of a US-European 5G competitor to China’s state owned Huawei via a US corporate takeover of Finland-based Nokia Corporation and Sweden-based LM Ericsson as a way to cement a new US-EU trans-Atlantic alliance by thwarting China’s ambition of becoming the global leader in fifth-generation telecom technology.

Speaking at the China Initiative Conference in February, Barr – who speaks fluent Mandarin and worked as a private-sector TMT (technology, media and telecommunications) lawyer for Kirkland Ellis – said the United States had only 18 months to roll out a 5G network or risk losing the leadership of the industrial Internet to Huawei.

The Biden administration should be able to use the White House bully pulpit and the Defense Production Act to persuade US big tech giants such as Oracle Corp and Microsoft Corp to create a US-EU 5G champion with Nokia and Ericsson rather than risk billions to acquire playthings such as China’s TikTok social-media platform.

The Biden administration can also carry out a policy of benign neglect regarding Iran by letting Trump’s Abraham Accords cement the UAE-Bahrain-Israel peace deal, which continues to bear substantial fruit such as the historic visit by Israel Prime Minister  Benjamin Netanyahu to the city of Neom in Saudi Arabia.

In fact, the UAE-Israel peace deal has already beaten all expectations regarding cross-border business cooperation, as witnessed by the FinTech Abu Dhabi virtual summit with the participation of Bank of Israel governor Amir Yaron and a delegation of leading Israeli tech companies led by Tekem founder Yossi Vardi.

The Biden administration can also follow Trump’s Business First strategy for Central Asia of using US private-sector investment to create sufficient economic regional stability to allow the pullout of US troops from Afghanistan.

The Business First strategy carried out by Commerce Secretary Wilbur Ross has been effective in not raising the hackles of Russian President Vladimir Putin while at the same time limiting China’s encroachment into Central Asia.

Trump’s continuing legal battles against the results of the election are ultimately a way to put President-elect Biden on notice regarding the true cost of failure as opposed to spiteful acts of a sore loser (Trump’s anger is mainly directed at the failures of the Republican National Committee and local Republican state chairmen).

Biden and his closest allies are fully aware that all the court records and allegations of election irregularities brought forth by Giuliani and others will serve as the Articles of Impeachment in 2022 in the event of a catastrophic failure of his administration over the next 18 months.

Biden would do well to reject extremist elements to his left and embrace a policy of bipartisanship by re-creating a centrist coalition.

Peter K Semler is the chief executive editor and founder of Capitol Intelligence. Previously, he was the Washington, DC, bureau chief for Mergermarket (Dealreporter/Debtwire) of the Financial Times and headed political and economic coverage of the US House of Representatives and Senate.