This Supply Chain Year Will Be Dependent on Politics

Like so many organizations, the Reshoring Institute did a predictions survey for 2024. The results surprised us.

Out of all the responses, politics was the most often cited regarding what will affect supply chains in 2024. Fifteen or 20 years ago, politics wouldn’t have garnered even a mention, as government and laws provided mere background and context for doing supply chain work.  But today, politics are on everyone’s mind and are expected to influence the majority of supply chain decisions this year.

The results and comments were mixed and sometimes in conflict, but the effect of politics on global supply chains was a consistent theme.

• 70% of respondents mentioned politics in their responses.

• If Trump is elected, the expectation is that America will turn inward, with emphasis on closing borders and reducing the U.S. involvement with other countries. Trump’s policies will drive more domestic sourcing and manufacturing.

• If Biden is reelected, the expectation is that more money will be invested in domestic industry to make American products more competitive in the world. Global partnerships will grow.

• Reshoring will trend upward under Trump or Biden, but manufacturing will continue to be plagued by labor shortages.

• Global trade will continue to grow, especially with Mexico under USMCA. The U.S. will continue to invest in infrastructure along the border (roads, bridges, customs enforcement).

• China trade will continue to be a focus of government policy with the trade war continuing, and new sanctions applied, especially on technology and electronics imports.

• Mexico will dominate trade with the U.S. (Mexico surpassed China as our biggest trading partner in 2023), while immigration will get the most press. Manufacturing will continue to move out of China and into Mexico.

• Environmental concerns and regulations will continue to put pressure on supply chains including recycling, forever chemicals regulations, reduction in packaging, returns, and carbon footprint reduction all along supply chain links.

• AI will continue to be adopted in supply chain information, with the expectation that new policies and regulations will affect its use. Neither Trump nor Biden seem to be AI-savvy.

Politics seems to be on everyone’s mind in this election year and the effects on supply chains are becoming evident in every aspect of our work. Governmental policies and regulations have become an integrated part of supply chain life.