There are already countless “What Will the Trump Presidency Mean for [Fill in the Blank]?” articles and blog posts being written. In the case of supply chain, the focus is on trade agreements and transportation infrastructure investments. The short answer is that we really don’t know yet. What candidates say on the campaign trail and what they actually do once they get in office don’t always line up — and as this election has shown, Donald Trump is the wildest card of all.
I wrote that back on November 11, 2016 after Donald Trump was elected the 45th President of the United States. And, for the most part, the same can be said again this time around after his election as the 47th President of the United States.
There were no articles or blog posts being written in November 2016 about “What Will the Trump Presidency Mean for The Covid Pandemic” because, well, nobody saw that coming. Similarly, since none of us can predict the future, we’ll just have to wait and see what happens over the next 4 years and respond accordingly.
In other news, if you’re old enough to remember getting AOL CD-ROMs in the mail, you’ll certainly remember Elwood Edwards. His name might not be familiar, but you know his voice, which would get you to walk over to your computer whenever he announced “You’ve got mail.” It was the 90s version of the ding we get now on our cellphones when we get a text or alert.
Elwood Edwards died this week at age 74. As reported by CNN:
In 1989, [Elwood’s wife] overheard former CEO of America Online, Steve Case, discussing adding a voice to the upcoming AOL software. She volunteered her husband, and Edwards recorded the phrases on a cassette deck in his living room. Those four phrases – “Welcome,” “You’ve Got Mail,” “Files done,” and “Goodbye” – would eventually be heard by hundreds of millions of people and become a staple part of the AOL experience.
And here is the man himself sharing that story:
May his memory be a blessing to all who knew and loved him, and all of us who loved hearing his voice whenever we got an email, which back then was mostly from family and friends, not spam.
Moving on, here is the supply chain and logistics news that caught my attention this week:
- Trade Sector Eyes a New Wave of Tariffs Under Trump (WSJ – sub. req’d)
- Russia behind plot to plant bombs on cargo planes, Western official says (NBC News)
- Houthi threat to shipping growing thanks to ‘unprecedented’ network of support (Lloyd’s List)
- FedEx and UPS Locked in Price War to Lure Small Businesses (WSJ – sub. req’d)
- 3 out of 4 European shippers have experienced supply chain disruption in the past 12 months – more than half with significant cost impact (Maersk)
- U.S. Drugmakers Are Breaking Up With Their Chinese Supply-Chain Partners (WSJ – sub. req’d)
- Amazon’s inbound fulfillment process is getting a makeover (Supply Chain Dive)
- UK watchdog finds competition concerns in GXO Logistics-Wincanton deal (Reuters)
Dialing Up Tariffs and Trade War
In July 2018, we published a post titled, “Tariffs And Trade War: What Should Supply Chain Executives Do?” At the time, the United States had levied the Section 301 tariffs on China imports. Most of those tariffs remain in place today, and in May 2024 the Biden administration raised tariffs on $18 billion of Chinese goods, including semiconductors and electric vehicles.
Over the years, we’ve published several posts on this topic:
- Tariffs and Trade Wars: Is Anybody Winning?
- U.S. Tariffs on Chinese Goods: Understanding the Updates
- Trade and Tariffs: Preparing for the Year Ahead
- US-China Trade War: One Good Outcome
- China Tariffs: A Lawsuit + WTO Ruling
In August 2023, as the race for “President of the United States” kicked off, we asked members of our Indago supply chain community — who are all supply chain and logistics executives from manufacturing, retail, and distribution companies — “If a debate were held to solely discuss supply chain related topics, what topics would you include on the agenda?”
Topping the list, by a large margin, was “Trade policy with China” which was selected by 65% of our member respondents. (See “A Presidential Debate On Supply Chain Issues” for more insights from the research).
And just last month, we asked our Indago members, “Is a tariff war a concern for your company as you develop your supply chain plans and strategies for 2025? Have you conducted any risk assessments or scenario planning specific to tariffs and trade restrictions in your supply chain? What actions will you take (or have you taken) to mitigate the cost impact?”
Indago members can download the report from our website, but here are a couple of comments shared by two of our supply chain executive members:
“For more than two years, at the corporate level, we have been moving from Asia to more local vendors. At the same time, we are looking to save [costs] elsewhere with the idea of passing as low as possible this burden to end customers. The market moves slowly to absorb price increases, and we cannot afford to lose customers.”
“A Trump presidency in which an all-encompassing tariff is placed on all imports would be catastrophic for our business. There are no workarounds, we would just have to absorb or pass on the costs to customers to make up for them. Given our previous history with Section 301 tariffs when they first went into effect, we would with high certainty push the impact of the tariffs on to our customers and increase our prices. Our margins are too thin to absorb the tariff without potentially putting our company out of business.”
In short, our Indago research results support what the Wall Street journal reported this week: “Companies that depend on global trade, from shipping giants to retailers, are bracing for a wave of new tariffs under a second Trump administration that could reset the flow of goods around the world and speed up a shift in manufacturing away from China.”
The bottom line is that the risk for a global trade war, with tit-for-tat tariffs, is growing as we head into 2025. Let’s hope and pray that this is the only type of war we experience with China or any other country in the years ahead.
And with that, have a meaningful weekend!
Song of the Week: “History Repeating” by Propellerheads feat: Miss Shirley Bassey
