Trump win & supply chain "pull forward"

With Donald Trump winning the U.S. Presidential election and making a historic return to the White House, supply chain professionals are now analysing the impact of the proposals and ideas that could impact the industry.

Judah Levine, Head of Research, Freightos has highlighted the "Pull Forward" effect. "The Trump win may start shaking up supply chains even before he takes office. Just the anticipation of higher tariffs may lead importers to pull forward shipments, creating a preemptive freight frenzy."

Levine had said in September that if Trump secures a victory in the upcoming election and his administration announces tariff hikes more far-reaching than in 2018, "the biggest economic impacts wouldn’t come from spiking container rates (which in any case would be temporary), but from increased costs to importers paying the new duties – which could be passed on as higher prices to consumers – and from potential retaliatory tariffs by China or other countries that could impact demand for US exports."

The Biden administration had kept many Trump-era tariffs in place, increased others, and recently has announced plans to shrink loopholes like the de minimis exception, which currently facilitate the surge of tariff-exempt e-commerce goods directly to U.S. consumers from Chinese platforms like Temu and Shein, the report added.

"As part of his planned policy in the event of a return to office, Trump has proposed applying across the board tariffs of 10-20 percent on most of the $3 trillion worth of annual U.S . imports, and a minimum 60 percent tariff on all imports from China."

Frontloading, Levine adds, will cause freight rates to feel the heat as importers race to dodge the extra costs, similar to what took place with Trump’s tariffs on Chinese goods in 2018 and 2019.

The Biden administration had proposed excluding large swaths of Chinese imports from de minimis eligibility. "If Trump moves forward with something similar, it could be a major challenge to the surge of Chinese goods arriving by air via platforms like Shein and Temu," says Levine.

Container shipping exper Lars Jensen writes on LinkedIn: “Trump has won the Presidential election in the U.S. This is not a political posting, but from a shipping perspective we should expect an added surge in U.S. import demand in the short-term as shippers with non-time sensitive goods will bring in more goods prior to any new tarriffs. As it is not known excatly how big such tarriffs might be, nor where they will apply and nor when this would happen it could amount to quite a demand surge.”

First published on stattimes