With Joe Biden inaugurated as US president, investors’ attention has shifted to his policy priorities. Asian investors are keen to see if some of the more stringent trade and investment measures against China taken by the Donald Trump administration will be rolled back or eased. Their hopes may be dashed. In the face of many urgent domestic emergencies, the Biden administration will have to focus in its early days on taming Covid-19 and revamping the government’s pandemic response. Any of Biden’s early foreign policy actions are likely to be about reconnecting the US with global institutions, traditional allies and agreements. Biden’s priority will be tackling the pandemic and addressing the economic damage it has wrought. Tragically, the US has recently recorded daily averages of around 250,000 new infections and 3,000 deaths. This resurgent wave of the coronavirus is not only putting the health care system under pressure, it is also hurting the economy again. Underscoring the halting nature of the economic recovery, December data from the US Centres for Disease Control and Prevention shows that the number of people travelling to workplaces was down 31 per cent versus pre-pandemic levels, and the number going out to shops and for recreation was down 25 per cent. Biden envisions a much more robust federal role in everything from testing to vaccine delivery. One of his key objectives is to vaccinate 100 million Americans against Covid-19 by the end of April, the 100th day of his administration. This would cover around one-third of the US population. So far, more than 16 million single doses of the vaccine have been administered in the US, and the daily vaccination number has risen to almost 900,000 . Hence, the 100 million target is plausible if the government can effectively mobilise operations. Biden is planning to significantly increase the number of vaccination sites, broaden eligibility for vaccination and find ways to increase vaccine production. Vaccination is important for US economic recovery in the second half of the year, especially the service sector, which is in turn critical for the path of the global economy in 2021. Covid-19 economic relief and stimulus are also key policy priorities for the new administration. US cannot afford to keep leaving Southeast Asia to China Biden has proposed a US$1.9 trillion stimulus package, which is around 9 per cent of gross domestic product – this, after Congress passed a US$900 billion fiscal support programme in late December. The proposed American Rescue Plan would provide an additional US$1,400 payment to Americans below a specific income level, expand unemployment benefits, set the minimum wage at US$15 per hour, and allocate billions in spending for schools, hospitals, state and local governments. If implemented, these proposals could have profound social and economic effects as well as impacts on the broad direction of fiscal and monetary policy. Without a Senate majority, very little of this programme was likely to be implemented. However, with the Democrats’ victory in the Georgia run-off elections, much more of this agenda could be enacted and it is likely to shape the investment landscape for years to come. There should be a will and a way for most – but not all – of this plan to pass Congress. This will be the first test of whether Biden can facilitate greater collaboration between the two parties. He has also spoken of another recovery spending programme focused on longer-term projects such as infrastructure and job creation, to be laid out in February. Given Republicans’ likely objections to the first spending plan, the second programme, which could mean higher taxes for corporations and high income groups, is likely to face even greater resistance. After four years of ‘America first’, Biden must pivot back to Asia Even if they cannot be fully implemented, these plans should help reassure investors that the government is in a stronger position to support the economy. The Federal Reserve should also be in a better position to prevent government borrowing costs spiking with its asset purchase programme. For Hong Kong, the US-China relationship remains a tense focal point, but patience is needed. The Biden administration is not expected to unwind Trump-era tariffs, tech export restrictions or limitations on investment in selected Chinese companies in the near term . One of the few points of agreement in Washington is that China is a long-term strategic competitor on various fronts. However, rather than wading into the China relationship immediately, Biden’s attention in the short term will be turned to reconnecting the US with allies and international organisations. On a more positive note, the new government should be less inclined to introduce new tariffs and other trade measures to pressure China in the near term. This should help reduce uncertainty, as well as the market anxiety that has sometimes marked the Trump era. Tai Hui is chief market strategist for the Asia-Pacific at JP Morgan Asset Management