How Politics Will Impact Supply Chains in 2024

A forecast survey conducted by the Reshoring Institute for 2024 has drawn attention with its results. According to the survey findings, politics has emerged as the most important factor that will impact supply chains this year. Politics, which was barely mentioned two decades ago, has become an element influencing most supply chain decisions today. Seventy percent of survey respondents cited politics in their answers.

If Trump is elected, the United States is expected to pursue a more inward-looking policy, close its borders, and reduce relations with other countries. These policies will lead to increased sourcing and production from domestic resources (See: Onshoring & Reshoring)

If Biden is re-elected, greater investment in domestic industry and increased global partnerships are expected to make American products more competitive in the world market. Under either Trump or Biden, Reshoring (return to domestic production) trends may increase, but labor shortages will continue to negatively impact manufacturing.

Global trade, particularly under the USMCA (United States–Mexico–Canada Agreement) with Mexico, will continue to grow. The United States will continue to invest in border infrastructure (roads, bridges, customs facilities). Trade with China, particularly with new sanctions applied to technology and electronics imports, will remain a focus of government policy. Mexico will surpass China as the United States' largest trading partner, with manufacturing shifting from China to Mexico, while immigration will attract the most press attention.

Environmental concerns and regulations will continue to pressure supply chains, including recycling, perpetual regulation of chemicals, packaging reduction, returns, and reducing carbon footprints across the supply chain.

Artificial intelligence will continue to be used in supply chain intelligence, and its use is expected to be influenced by new policies and regulations. Neither Trump nor Biden appear to be experts on AI.

Politics, on everyone's mind in an election year, is having increasingly visible effects across every dimension of our supply chains. Government policies and regulations have become an integrated part of supply chain life.

Key Takeaways:

• Politics is the most important factor that will impact supply chains in 2024.

• Trump's election would increase domestic sourcing and production, while Biden's election would prioritize investment in domestic industry and global partnerships.

• Reshoring trends will increase under both Trump and Biden, but labor shortages will persist.

• Mexico will emerge as the United States' largest trading partner, while sanctions on trade with China will continue.

• Environmental regulations will play an important role in supply chains.

• Artificial intelligence use will increase, though new regulations are expected.

News Link: https://www.supplychain247.com/article/supply-chain-waits-on-political-winds