Supply chain issues have been more of a central topic in this year’s election than they’ve been in decades. The challenges that the pandemic and shutdowns have created has brought global attention to logistics and supply chains.
In July, President-Elect Biden outlined a comprehensive plan for addressing supply chain and trade issues, which has since been updated. While uncertainty continues to linger, some of the details of President-Elect Biden’s plan helps to shed light on what the industry could anticipate in coming months. As an initial takeaway, it’s clear that addressing logistics concerns is a priority of the new administration.
Below are the possible changes we can anticipate
Key Points of Biden’s Trade Policy Plan
One important point of President’-Elect Biden’s plan is ensuring that the United States has access to certain vital items. To accomplish this, Biden will utilize the Defense Production Act to require companies to produce certain essential goods domestically as well as the Procurement Act to utilize federal purchasing power.
In order to ensure that vital products are available, Biden’s plan includes $400 billion in federal procurement of US-made goods. Additionally, the plan includes proposed tax code adjustments that would encourage pharmaceutical companies to manufacture products domestically as well as offer incentives for other industries to follow suit. The plan also includes incentives for companies to maintain a surge capacity inventory of certain products.
The Biden administration will work to improve relations with the EU and soften tensions with China. President-Elect Biden has suggested that he will work with allies to move away from dependence on China, however he made it clear that a competitive alternative needs to be in place before decoupling can occur. While it’s not entirely clear what US-China relations will look like during a Biden administration, it’s likely that there will be increased trade with markets in both the EU and China.
Biden plans to rejoin the Trans-Pacific Partnership. If he could get the TPP ratified by the Senate, it could have significant impacts on the logistics industry by opening up trade with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
There continues to be a lot of uncertainty when it comes to logistics and supply chains due to disruptions caused by COVID-19 globally. The US Presidential election has added to the uncertainty, but with the elections over, companies can begin looking at Biden’s Trade Policy plans to better anticipate what changes are ahead.
For additional information about these plans or for any questions about supply chain or logistics issues, contact our team of global experts.