Holding Our Breath: Supply Chain Impact of the 2024 Presidential Election

"Have you fully thought this idea through?" - A longtime friend

There are less than two weeks to go until the 2024 U.S. Presidential election. Even if you’re not a news junkie like me, it still looms large.

In Q1, I might hear a few comments here and there. By Q2, politics became an increasing part of even the most common supply chain conversations and podcast or webinar pre-interviews. In Q3, most medium to long term questions involved some version of ‘Let’s see what happens in November’ or ‘It all depends on the outcome of the election.’

But this month? It feels as though the world is holding its breath.

Most of the news is directed at us as voters. It is hyperbolic to a fault, and hardly tailored to the specific information needs of procurement and supply chain professionals. Over the summer, I started thinking about doing this series, finding a way to do a podcast series on the Presidential election without getting political (or causing trouble). 

The solution I came up with combines a select number of policies relevant to supply chains and limited my sources to candidate interviews, their campaign websites, and their party platforms. The policies I selected are supply chain, trade, and tariffs (with a special focus on China), energy and the environment, pricing regulations, and the corporate tax rate.

Creating this series was far more intense than I expected, but it was an invaluable experience.

Two additional notes before I share a comparison of the major party candidates’ positions: 

1. It was much easier gathering primary source data from Vice President Kamala Harris, because the information from former President Donald Trump was so much more extensive. There is simply no way I could review it all.
2. As I noted in part 2 of the series, I’m still not sure about the extent to which Vice President Kamala Harris’s New Way Forward and the official Democratic Party platform document coexist, compared to the Make America Great Again platform shared by the Trump campaign and the Republican party.

For a complete listing of my sources, visit the 2024 U.S. Presidential Election Special Series on Art of Procurement.

Supply Chains

Harris’s approach to supply chains focuses on critical industries and supplies: semiconductors, auto manufacturing, and food production, while Trump is more focused on reshoring and preventing companies from moving their operations outside of the U.S. regardless of industry.

Each of the candidates made good points above and beyond their general supply chain positioning.

I appreciated Trump’s recognition, shared during an interview with Bloomberg News Editor-in-Chief John Micklethwait at the Economic Club of Chicago, that 'Made in the U.S.A.' can mean more than one thing. That recognition will determine how many jobs of what kind and how many supply chains remain (or become) domestic.

Harris, on the other hand, goes into great detail about the need to support smaller food producers in order to make domestic food supply chains more robust. I’m not sure how that would impact food costs, but if it does work, I would also like to see the approach applied to baby formula (for instance), where there is too much domestic market concentration.

Regardless of who wins, it will be interesting to see if they keep the White House Council on Supply Chain Resilience, and if the participants in that council become more varied than just the Cabinet minus the Vice President and the Education secretary.

Trade and Tariffs

With trade and tariffs, I found the first of two imbalanced policy areas. 

In my opinion, there is a real shortage of specifics from the Harris campaign. In fact, there is hardly a mention of either trade or tariffs beyond comments about Trump’s plans for both.

This is an area where Trump not only has a very defined policy, he is extremely sure about it. Tariffs for everyone, high tariffs where they are needed, especially where there is an imbalance in trade. "To me the most beautiful word in the dictionary is ‘tariff,’" he said. The concern, of course, is that tariffs will make costs go up, even if they do save American jobs in the short term.

Moving to China, I was glad to see both candidates speak candidly about the threat they pose.

Kamala Harris is focused on labor rights as well as intellectual property protections, and wants the U.S. to hold a leading position in the race to dominate AI. Trump has outlined plans to revoke China’s Most Favored Nation status and limit their ability to invest in the United States by buying property and companies.

Although Trump does not speak as often about clean energy and the environment as Harris does, he has expressed concern about the fact that Chinese-made EVs will dominate the market if they are allowed to based on price, unless - of course - a tariff is put in place.

Energy and the Environment

The candidates’ proposed energy policies are very different. Kamala Harris is dedicated to the clean energy transition, while Trump declares his plan to “drill baby drill.”

While Harris is focused on renewables, Trump speaks frequently about the cost of energy - something that all companies and industries should be concerned about. Interestingly, both talk about wanting the U.S. to become a net energy exporter, understanding the potential power associated with this role in the world’s supply chain.

Moving to the environment brings us to the other policy area where I found an information imbalance, although this time the tables are turned.

In line with her energy policy, Kamala Harris’s platform has extensive information on climate action, clean energy, and clean production. What we don’t yet know is how much regulation would accompany such a push and how it would work in practice. 

We have a lot less information in this policy area from Donald Trump, especially on emissions.

One of the specific statements I did find was about a nuclear plant in Georgia. Ironically, a turn (back?) to nuclear may be the closest to what ends up happening regardless of who is elected, simply because AI requires so much energy. Constellation Energy and Microsoft have already signed a deal to bring Three Mile Island in Pennsylvania back on line to support data center energy consumption.

Price Controls and Taxes

While not traditional policy areas, I felt that the candidates’ positions on pricing regulation and the corporate tax rate were important pieces of the puzzle to include in the series.

On price fixing, whether through a federal ban on price gouging (Harris) or a limit on the interest rates credit card companies are legally allowed to charge (Trump), the power of the executive pen could create real challenges for companies… even in the name of protecting consumers.

Last but not least, Kamala Harris has proposed raising corporate taxes from 21 percent to 28 percent while Trump has proposed reducing them from 21 percent to 15 percent.

If we take a corporate perspective on taxes, and since this series aims to cover the candidates from a professional standpoint rather than a voter standpoint, lower taxes allow companies to make more decisions about how to spend, invest, and grow. BUT - if we do get higher tax rates, it will probably elevate the role of procurement, because companies will need to do the same - or more - with less cash.

The candidates are locked in a tight race. Either one could pull out a win, and we may not know right away who has come out on top.

We have about 60 days before a new President takes office. Deciding in advance which policies - supply chain, trade, tariffs, China, energy, the environment, etc. - will affect your company and your suppliers the most will give you time to put new plans and strategies in place.

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