What The Presidential Election Results Mean For Supply Chains and Trucking

People are starting to cast their ballots for the next president of the U.S. The outcome of the election could impact supply chains, tariffs, and emissions regulations. The So California Supply Chain Meetup recently held an event to discuss what we might see following the election results. 

(L to R) Allegra Roza, Rolina Camello and Mike Bush,

Mike Bush, Head of Marketing, Talon Logistics; Rolina Camello, Regional Director, West, ContainerPort Group; and Allegra Roza, Senior Associate, Cushman and Wakefield discussed the implications of the next presidential administration. 

1. What’s top of mind for supply chain stakeholders related to the election?

Camello: A lot of the talk about the elections is more or less tariffs. That's the big thing. A lot of shippers have already been doing China +1, moving their sourcing to Southeast Asia and India to keep things diversified. If Trump wins, there'll be an expedited move to try to find other factories. A lot of shippers are front-loading to try to avoid the risk of being caught with higher tariffs. If Harris wins, it'll still be China +1, but escalated at a slower rate.

Bush: There's potential for really aggressive tariffs, which we've seen before. If you look back at 2019 and 2020, when tariffs were being rolled out, there was a massive move by a lot of shippers who were doing business in Asia to say, “I'm going to move my sourcing and my manufacturing to Eastern Europe and then take advantage of the East Coast ports.”

2. Aside from China, how might tariffs impact other sourcing locations for U.S. BCOs? 

Roza: What’s interesting is how either candidate will impact tariffs on imports from Mexico. There's a lot of manufacturing going on in Mexico. Labor is cheaper. Mexico is a very hot topic for a lot of users.

Camello: Mexico has definitely been growing. It's a great option, cheaper labor, closer to market. For many shippers, it makes sense, and they've been doing it for years. We've had lots of requests for cross-border. Depending on how the elections turn out, it might be something that slows down a bit. 

3. How would the next administration handle transportation regulations?

Camello: Zero emissions are going to stay. I don't think we're ever going back to diesel. Who doesn't want clean air? But the play to get there is what we're looking at – the calendar and the timeline. How do we do that efficiently and make it work for everybody where it's affordable? If Trump is elected, regulations will still be enforced, but they won't be as dramatic. It'll be executed at a little easier pace to try to figure out how we're going to implement this. With Harris, there would be more focus on oil and gas, and the regulations would move in at full force. 

Roza: Harris has a stronger take on green initiatives. With Trump, we do see some talk that it's going to be more fossil fuels. At the state level, California has some EV mandates and the largest GDP in the nation. A lot of goods are coming from our ports. So businesses are going to have to stay here. Regardless, they're going to have to comply with these green initiatives.

4. We just saw a port strike, and automation is a big sticking point. What do you think the next president would do about port automation and investments?

Camello: Automation is going to happen either way because we have to think about sustainability. We also have to be careful and think about people's jobs and what's the right thing to do. You're stuck in between. In my mind, we need automation, but we also need the old-school terminal, because we still have out-of-gauge freight that comes in, and you need manpower to move the equipment. With Harris, it might be a slower move of automation.

Roza: Under the current president, ports have received tons of infrastructure grants. In the logistics industry, we need grants to improve our infrastructure and our highways. 

5. Related to logistics, what would be the best part of Trump winning? Same question for Harris?

Roza: The biggest thing when you're looking at Trump’s plan is the corporate tax cuts. Currently it's 21%, and there's been talks of 15%. For a business, that brings in more cash flow, and more money to invest in your operations, labor, technology, and infrastructure. But in commercial real estate, elections really don't matter. It doesn't move our market. The economy does.

Camello: As far as zero-emissions regulations, I believe it'll be a slower playout with Trump. Rome wasn't built in a day. My hope is that we start to do it at a pace that we can actually breathe. With Harris, if the tariffs stay in place, that would be a good outcome for shippers versus increased tariffs. 

6. How should shippers prepare for the election results? 

Roza: Start taking a proactive approach and educating yourselves. Really understand what policies affect your business and how you can strategize for the upcoming year on how it will affect your bottom line. 

Bush: It's an ounce of prevention worth a pound of care. You don't set up a new warehouse or a new factory overnight. This has to be a longer-term play. A lot of the things that we're going to see as preparation are going to be part of the plan moving forward.

Camello: We learned with COVID that we can get caught in that moment where we don't have a plan. After COVID, everybody is being as creative as they can in planning for the worst so they can be ahead of the curve. Even if we think we plan for everything, there's going to be something else that happens. We have to work smarter and more efficiently, and we have to have different strategies in place.