November 2024

Additionally, by alleviating inflationary pressures, this could contribute to a faster decline in interest rates, which may stimulate consumer demand. Such developments would not only support domestic manufacturing but also encourage the import of goods from overseas. While this would positively impact shipping, air cargo, and international freight forwarding, it might be counteracted by Trump’s plans to raise tariffs.

• Positive for domestic trucking, rail, intermodal, parcels, warehousing 
• Positive for shipping, air cargo and international freight forwarding 

Tariffs 

One of Trump’s key commitments in his manifesto has been to impose significant tariffs on foreign imports, particularly those from China. He has stated his intention to implement a tariff ranging from 10% to 20% on all imports, regardless of their country of origin, and a tariff of 60% or higher on goods entering the U.S. from China. This approach is likely to encourage more reshoring to the U.S. and prompt Chinese manufacturers to relocate production and warehousing to the U.S. or near-source goods from Mexico. However, these movements might also be scrutinized if Trump suspects that Chinese manufacturers are undermining the USMCA trade agreement.

In contrast to the deflationary effects of lower oil prices and reduced regulation, these tariffs will increase costs for both consumers and manufacturers. Europe is unlikely to be exempt from these trade measures; relations were already strained during Trump’s previous presidency. If Europe responds with its own trade measures, it could impact transatlantic trade while also potentially supporting and protecting European manufacturing, leading to an increase in local logistics demand.

• Negative for shipping, air cargo and international freight forwarding 
• Positive for US warehousing 
• Positive for European regional logistics 
• Impact on domestic trucking and logistics unclear, potentially negative 

Taxation 

One of Trump’s key policies is to reduce or eliminate various types of taxes. This includes cutting corporate taxes on domestic manufacturing and providing incentives for machinery, equipment, and research and development (R&D). The goal of these changes is to stimulate domestic growth and create jobs.

• Positive for domestic trucking, rail, intermodal, parcels, warehousing 

Regulation

Many businesses are optimistic about the prospect of reduced regulations following Trump’s commitment to eliminate 10 existing regulations for every new one introduced. However, Trump’s plans extend beyond this promise. Elon Musk may lead an “efficiency commission,” and entire government departments could be dismantled. The objective is to decrease the size of the government and lower business costs, which could positively affect inflation and serve as a significant stimulus for the domestic economy.

• Positive for domestic trucking, rail, intermodal, parcels, warehousing 

Conclusion 

The primary beneficiaries of Trump’s election will likely be US trucking and other domestic logistics services. Conversely, international shipping, air carriers, and freight forwarders may face challenges. However, it’s important to note that strong US economic growth could stimulate some expansion in these sectors. Before tariffs are implemented, we can expect a significant spike in imports as businesses rush to avoid additional costs, which will likely result in a temporary increase in shipping rates. It remains uncertain how much the extra costs from tariffs will offset the deflationary effects of tax and regulatory reductions.

While a trade war might seem bold, the reality is that the U.S. stands to lose more than it could potentially gain. Contrary to popular belief, China is not a vulnerable target. In fact, it is well-positioned to withstand a trade conflict due to its tightly controlled economy, significant manufacturing capabilities, and growing global influence. The idea that China will falter under the pressure of U.S. tariffs or economic strength overlooks both the resilience of China’s system and the vulnerabilities within our own economy.

For decades, China has strategically established itself as the world’s manufacturing powerhouse, controlling vital sectors of global supply chains. Currently, it produces 30 percent of the world’s goods, a feat achieved through policies that emphasize massive subsidies, low production costs, and infrastructure development. With such control over global markets, any economic disruption, especially one initiated by the U.S., could send shockwaves back to American consumers and businesses. From electronics to medical supplies, the U.S. relies on China more than many Americans realize, and severing that dependency abruptly would result in chaos across our stores and industries.

For more information, contact David Lychek, Director – Ocean & Air Services.