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The first two months of 2024 have already put stresses on U.S. supply chains due to many global disruptions. We find ourselves in the midst of a presidential election year, leaving many people wondering how this will further impact the U.S. economy. This year marks the 60th quadrennial presidential election, scheduled for Tuesday, Nov. 5.
Predicting the specific impacts of a presidential election on supply chains and logistics is challenging due to the inherent uncertainty of future events and the complex interplay of various factors. One thing that is sure is that presidential elections do create additional risk and disruptions to supply chains. The actual effect of the 2024 election on supply chains will depend on several key factors, such as the specific platforms and policies of the candidates, the overall economic climate, and the level of political polarization and gridlock.
We can analyze historical data and identify potential trends from previous election years and provide a general understanding of how election years might impact supply chains. The COVID-19 pandemic overshadowed any potential election-related effects on supply chains in 2020. However, some analysts suggest the trade war between the U.S. and China, initiated during the Trump administration, contributed to preexisting disruptions. The election of Donald Trump in 2016 led to increased uncertainty in trade policies, causing some businesses to delay investments and stock up on inventory, temporarily impacting supply chains. There were no significant disruptions in 2012 that were directly attributed to the election, but existing economic factors like the eurozone crisis continued to impact supply chains. The financial crisis in 2008 significantly impacted global supply chains, making it difficult to isolate any specific election-related effects.
While past elections offer limited concrete examples, there are several areas where the 2024 election might influence supply chains and logistics. First comes trade policy, where Democratic and Republican candidates typically have distinct stances on trade agreements, tariffs and foreign relations. These policies can significantly impact the cost and flow of goods imported and exported from the U.S. Both parties generally agree on the need for infrastructure improvements but differ in funding priorities and specific projects. Infrastructure upgrades can directly affect transportation efficiency and logistics costs, which have been pivotal in the past few years. Changes in regulations and labor laws can impact production costs, worker availability and overall supply chain efficiency. This can vary significantly depending on the specific policies enacted. We know that talent is a challenge that will not be solved anytime soon, and immigration policies might cause further impacts on already existing labor shortages, for example in warehouses. Election outcomes and resulting economic policies can further influence consumer confidence and spending patterns, affecting the demand for goods and potentially causing temporary disruptions in specific sectors.
While the 2024 presidential election might have an impact on supply chains and logistics, it’s difficult to predict the exact nature and extent of these effects. The specific policies implemented, the overall economic climate and the level of political cooperation will all play crucial roles in determining the outcome. Nevertheless, the election will disrupt supply chains combined with existing disruptions. Hence businesses should stay informed about the candidates’ platforms and potential policy changes but also consider other factors influencing the supply chain landscape in order to make informed decisions and mitigate potential risks. Risk management solutions, digital twins and simulation tools can all help supply chains build different scenarios for potential outcomes and help better prepare for the outcome of the election.
Bart De Muynck is an industry thought leader with over 30 years of supply chain and logistics experience. He has worked for major international companies, including EY, GE Capital, Penske Logistics and PepsiCo, as well as several tech companies. He also spent eight years as a vice president of research at Gartner and, most recently, served as chief industry officer at project44. He is a member of the Forbes Technology Council and CSCMP’s Executive Inner Circle.