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The 2024 Harris - Trump Election, Tariffs, and the Economy: What’s In Store for Global Trade Next Year

In the context of an election season, tariffs as a political strategy and as an instrument of trade policy are very much an economy-wide issue. Since 2016, Trump has promoted tariffs as a tool to “level the playing field”, punish bad actors, and promote domestic industries (so-called protectionist trade policies which seek to create U.S. jobs, or even revive entire domestic industries). As a matter of practice, our law firm always strongly encourages our clients to at least have in mind backup sources of raw materials and components, and alternate logistics options, as the COVID-19 pandemic showed, when hit with a curveball, things can grind to a halt rapidly. The same goes for the 2024 election, where the winner could significantly alter global trade.


Economists, while a cautious bunch who generally see tariffs as a tax on Americans, also recognize that there are good and bad tariffs, as well as good and bad effects from tariffs. For example, some tariffs in recent years have been directly credited with creating U.S. jobs. Donald Trump’s washing machine tariffs created nearly two thousand (2,000) jobs. However, economists have determined that these jobs cost the economy an average of almost one million dollars ($1,000,000) per job while predictably raising the price and washing machines, and dryers, as it turned out. This provides a clear breakdown of how tariffs really work, covering both their advantages and disadvantages. The question for policy makers and presidents is: when do the advantages outweigh the disadvantages?


As an international trade law firm, we will leave the complex number crunching to the economists. However, we can speak to the more specific effects of tariffs on discrete industries, the costs of materials required by these industries, and their impact on the flows of imports.


The U.S. Constitution actually gave Congress the sole authority to regulate trade, including levying tariffs. However, Congress has transferred some of this authority to the president over time (along with a host of additional powers), particularly the authority to impose tariffs in response to actions by foreign trading partners, where national security is involved (a famously vague carve out), as well as during national emergencies, which the president can unilaterally declare. Tariffs instituted by presidents come in the form of executive orders.


While Biden famously elected to retain some of Trump’s tariffs on Chinese goods, even increasing some, he also worked quickly to remove Trump-era tariffs on steel and aluminum. In a potential Kamala Harris presidency, Harris is likely to be keenly aware of the costs tariffs impose on American consumers and be skeptical of any potential benefits, given how heavily increases in the cost of living weighed on the Biden administration. Harris is expected to take a surgeon’s approach to tariffs should she win the 2024 election. This would mean applying tariffs to highly specific sectors and products strategically for the most significant impact, while reducing the negative impacts of tariffs to the widest possible cross section of American consumers.


On the other hand, Trump, who has harbored a protectionist philosophy for decades, applied tariffs broadly and decisively in his first term. In his first term Trump issued significantly more executive orders related to trade than his predecessors. Trump imposed tariffs on:


  • Imported steel and aluminum

  • Washing machines

  • Solar hardware

  • Semiconductors

  • Batteries

  • And twenty-five (25) percent tariffs on a wide range of Chinese goods


In his current campaign, Trump has doubled-down on tariffs as a policy tool to promote U.S. economic growth, revive domestic industries, and create American jobs. Beyond significant tariffs aimed at discrete sectors and products, Trump has proposed a ten (10) to twenty (20) percent blanket tariff on all imports, and an unprecedented sixty (60) percent tariff on imports from China. Tariff’s this sweeping tend to alarm economists across the board. Trump’s tariff plans for a 2024 victory have been met with what can accurately be described as universally negative response. Coverage by economic and policy analysts is dominated by words like “extreme”, “disastrous”, and inflation-inducing”. Beyond the math, this is likely also because the economy doesn’t like rapid, large-scale changes (again, think back to the COVID-19 pandemic). Now, we are not political analysts, maybe Trump’s tariffs are the wild gamble that would pay off big-time and economists are simply not able to think outside the box. However, what is undeniable is that such major moves would shake up the global economy and supply chains, alter raw materials and components sourcing, and have significant knock-on effects across industries who rely on imports.


The highly unpredictable nature of who will win the election, what the winner will do on the economy, and the potential impacts of wide-ranging tariffs is where working with an experienced international trade law firm can pay dividends in the long run. It is precisely when things are running smoothly that we encourage our network to think about what can go wrong in global supply chains and costs, and to begin thinking about contingencies.


For example, if you are a U.S.-based bicycle manufacturer reliant on your current supply of aluminum from overseas and there is what looks like a fifty-fifty (50/50) chance that major tariffs hit aluminum imports again in less than a year, what is your move today? Contact us to discuss your contingency plans for 2025 and beyond.


Give our office a call today at (917) 546-6997, we would be happy to speak with you.


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