With just one week to go until Election Day, businesses across industries are closely watching the U.S. presidential race, as its outcome could have significant implications for the global supply chain. From policy shifts to international trade relations, here are some key areas where a new administration—or continuation of the current one—could impact supply chain operations.
1. Trade Policy and Tariffs
The outcome of the election could lead to major changes in trade policies and tariffs. A shift in administration may bring a reassessment of tariffs with key trading partners, including China and the European Union. Changes in trade agreements and tariff rates could affect costs for raw materials and components, impacting pricing and availability of goods across industries. Businesses heavily reliant on imports will need to prepare for potential disruptions or increased costs in their supply chains. These changes, if enacted, wouldn’t take hold for a quarter or two into 2025, however businesses should keep an ear to the ground for domestic manufacturing.
2. Infrastructure Investment
Both candidates have highlighted infrastructure as a priority, though with differing approaches and levels of investment. Increased infrastructure spending could improve the U.S. transportation network, resulting in faster, more efficient logistics. This could lead to reduced transportation costs and fewer delays for domestic shipments. However, a delay or reduction in infrastructure investment might further strain the logistics sector, exacerbating challenges like port congestion and road maintenance. Recently we saw a strike among port workers and operators over unsatisfactory contracts and conditions. This will be a situation to monitor as well when the infrastructure bills come piling in February 2025.
3. Labor and Workforce Regulations
Labor policy changes could have a significant impact on the supply chain workforce, especially for sectors relying on manual labor like manufacturing and transportation. Potential changes to minimum wage, labor protections, and workforce safety regulations could affect operating costs and labor availability. Businesses should monitor any shifts in labor policies that may influence the workforce's stability and productivity within the supply chain. For example: Trump wants to cut out taxes on overtime and tipped wages, meaning many warehouse and storefront workers will see a large increase in their income if the Republican Party prevails
4. Environmental Regulations
Environmental policy is likely to be a major point of divergence between the candidates. The election could lead to stricter environmental regulations, impacting manufacturing and logistics.
New policies might demand investments in cleaner technology and energy-efficient processes, which could increase operational costs in the short term but potentially reduce emissions in the long run. Companies should prepare for potential shifts in environmental compliance requirements that may influence how goods are produced and transported.
Stay Prepared
While it’s impossible to predict exactly how the U.S. presidential election will affect the supply chain, businesses can expect that key areas—like trade policy, infrastructure, labor, environmental regulations, and pandemic response—will likely see changes. Preparing for these potential shifts and staying agile in the face of evolving policies will be crucial for businesses seeking to maintain supply chain resilience in an uncertain political landscape.
