U.S. trade policy in question as election nears: new tariff hikes could threaten U.S. tech and force supply chain rethinks

With the U.S. presidential election approaching on 5 November, the contrasting trade positions of Democratic candidate Kamala Harris and Republican candidate Donald Trump are creating uncertainty for U.S. shippers, tech companies and global supply chains.

While neither candidate is a staunch proponent of free trade, Harris has signalled a cautious approach that includes maintaining some existing tariffs. In contrast, Trump’s more aggressive stance on tariffs could significantly alter trade dynamics, impacting U.S. industries, supply chains, and consumers alike, according to Stephen Olson, Visiting Fellow at the Institute of Southeast Asian Studies.

Speaking on the latest episode of The Freight Buyers' Club Podcast, produced with support from Dimerco Express Group, he said: “She would continue maintaining the Trump-era tariffs… and has expressed a willingness to use strategic tariffs to support U.S. workers.”

However, he noted that Harris’s focus on bolstering green industries could affect different sectors in varying ways.

Trump, on the other hand, has declared that he would pursue extensive tariff hikes if elected, promising to protect American industries. Proposals range from a 10% universal import tariff to a staggering 500% tariff on Chinese EV imports.

Lobbyists, analysts and economists have argued such tariffs could disrupt trade and increase costs for U.S. consumers and businesses without necessarily bringing jobs back to the U.S. Olson said that for US exporters and importers, the stakes were high.

“Trump has articulated what would be the most protectionist U.S. trade policy in at least 100 years,” Olson added, pointing to the likelihood of retaliatory tariffs from key partners such as the EU and China. “There's a real danger that we could be heading for a spiralling trade war along the lines of what we saw in the aftermath of the Smoot-Hawley tariffs during the 1930s,” he warned.

U.S. Tech impact

Speaking on The Freight Buyers’ Club, Ed Brzytwa, Vice President of International Trade at the Consumer Technology Association (CTA), warned that Trump’s proposed tariffs could have a drastic effect on the consumer technology sector.

“Tariffs are taxes on Americans, and they’re regressive,” he said. A CTA study released earlier this month found that Trump’s proposed tariffs would see “the purchasing power of U. S. consumers for consumer technology products decrease by $90 billion”, with potential price hikes of 46% on laptops and tablets and 26% on smartphones.

“Americans may say they're willing to pay more for a product made in the United States, but if the price is too high, they're not going to be able to purchase those products,” he added.

Brzytwa also emphasized the risk of retaliation, which he argued would “make the United States less competitive.”

With the tech industry facing significant challenges if tariffs increase, Brzytwa underscored the challenges of reshoring manufacturing to the U.S. “A US$500 billion investment and a tenfold increase in labour would be required over ten years to bring tech production back to the U.S,” he said. In his view, the costs are prohibitive, and the workforce simply isn’t there.

Supply chain upheaval

Olson also highlighted how the increasing complexity of dual-use technologies in everyday products, such as smart refrigerators and modern cars, is likely to result in ever more stringent trade barriers. “An expanding portion of the products we trade contain dual-use technologies, so the level of restrictions, barriers, and additional permissions you're going to have to get are only going to increase.”

He urged logistics and supply chain professionals to prepare for a challenging road ahead, with a more fragmented trading landscape inevitably resulting in more complex supply chains.

“My strong advice would be to go into your boss's office and request a pay raise because your job is going to get a lot harder,” he said.