The 2024 Election: Where is the United States headed?

During the 2024 Presidential election, trade remains a key economic topic.

Both candidates—Kamala Harris and Donald Trump—bring distinct approaches to international commerce, tariffs, and domestic industry protection. This article from Atradius Economist, Dana Bodnar focuses on the global impact of both outcomes of the election. The next president’s trade tactics will influence American businesses and the global economy, underscoring the importance of understanding each candidate’s stance on key trade issues. We have an update after Trump’s win on Wednesday morning from Atradius Economist, Dana Bodnar, looking more into what to expect from him moving forward.

Trade Policies: Harris vs. Trump

Kamala Harris

Harris is expected to pursue a balanced approach between safeguarding American economic interests and maintaining cooperative international trade relationships. Her platform leans towards scrutinizing trade agreements to ensure they align with both labor protections and environmental standards, reflecting a focus on sustainable trade that supports American workers. If elected, Harris may prioritize economic policies that protect U.S. industries while fostering sustainable trade agreements.

Donald Trump

Donald Trump’s trade agenda has historically focused on a protectionist approach. His proposals include a blanket 10% tariff on all imports, with specific tariffs on Chinese goods reaching as high as 60%. While these tariffs aim to protect domestic industries and reduce the trade deficit, they could lead to significant changes in import dynamics, manufacturing costs, and pricing for U.S. consumers.

Shared Views

Both candidates agree on restricting investments in sectors deemed sensitive, such as advanced technology and military equipment, to limit foreign influence in crucial industries. This continued caution, especially with China, indicates a likely continuity of measures restricting investment in sensitive sectors.

Update: Post-Election Trade Policy Outlook Under Trump’s Administration

With Donald Trump winning a decisive re-election, we now have a clearer sense of his planned policies and their implications for U.S. trade and global relations. Here are some key points from Atradius Economist, Dana Bodnar based on his post-election speech and anticipated policy trajectory:

Phasing in Tariffs

Starting in late 2025, we anticipate a phased introduction of tariffs on Chinese imports and potentially extended to other markets, including the EU. With Republican control of the Senate, Trump’s path forward on trade appears streamlined, with the possibility of utilizing executive powers—like the International Emergency Economic Powers Act (IEEPA)—to accelerate these tariff measures. This approach could lead to rapid shifts in import demand and domestic pricing dynamics.

Inflationary Impacts on U.S. Consumers

Increased tariffs will likely drive up the cost of imported goods and, subsequently, domestic goods that rely on foreign materials. This tariff-driven inflation could hit from 2026 onward, compounded by fiscal stimulus policies, including the continuation of tax cuts and heightened defense spending. These factors may keep inflation elevated above the 2% target, which could slow the pace of expected Fed rate cuts.

Supply Chain Restructuring and “Re-shoring”

Trump’s approach is likely to further de-risking trends, encouraging manufacturers to bring production back to the U.S. While “friendshoring” to allied countries like Canada and Mexico has been a focus, Trump’s recent comments suggest potential trade restrictions with traditional allies as well. Additionally, anti-dumping measures could limit the redirection of imports through intermediary countries like Vietnam, further pushing re-shoring efforts.

Increased Tensions with Global Trade Partners

As Trump advances his trade policy, heightened tensions with China and other major trading partners are probable. Trade restrictions could lead to reciprocal tariffs from these nations, which would further elevate costs for U.S. businesses and consumers.

As Trump begins his second term, we’ll continue to monitor and analyze these developments. Stay tuned for additional updates as we track the economic impacts and trade dynamics in response to these policies, looking at specific industries and international relationships as they evolve in the coming years.