Insights by Auba (Nov 14th): How Trump Could Restructure Logistics
Welcome back to Insights by Auba!
Your go to newsletter for all things logistics, nearshoring, and supply chain (all with original research from data department to wherever you get your news!)
Trump's Impact on Trade
Last week, former president Donald Trump was reelected to serve as the nation’s chief executive. The republican party, which nominated Trump, also secured a majority in the Senate and, although votes are still being counted, is close to a similar hold of the House . With all likelihood, Trump will enter the presidency with a large degree of power. One that will easily reshape the global economy.
Most importantly, the former president is almost certainly changing the norms of global trade as he hinted multiple times across the campaign trail. President Trump proposed a 60% tariff on Chinese imports and a 25% tariff on Mexican imports until Mexico addresses immigration concerns and cartel violence. All of this while also enforcing a 10% blanket tariff for all other countries. These tariffs are part of Trump's broader strategy to reduce U.S. reliance on foreign manufacturing.
Now, based on Trump’s most recent promises to increase tariffs, we wanted to estimate the impact such policies would have on the U.S. economy. To do so, we looked at the imports from the 15 largest trade partners to the U.S. and the aggregate for the rest of the world.Our estimates of the tariff cost to each country are shown in the graph below.
Read more below:
The Week in Short
?? The International Longshoremen’s Association (ILA) walked out of negotiations with the United States Maritime Alliance (USMX) after two days, citing USMX’s proposal to implement semi-automation despite previous assurances. Both parties agreed initial talks were productive, the breakdown underscores deep divisions with ILA’s right to strike remaining intact if a new agreement is not reached by January 15? (more on Sea Trade Maritime ).
?? Mexico’s airfreight traffic continues to grow, with a 7.1% increase in tonnage over the first nine months of 2023, largely fueled by international carriers and nearshoring demand. Key contributors include strong gains at Felipe Angeles International Airport following a freighter ban at Mexico City’s Benito Juarez Airport (more on Load Star ).
???? A protest in Nuevo Laredo, Mexico, has blocked northbound cargo traffic at the World Trade Bridge, the busiest U.S. cargo crossing, causing significant delays for shipments into Laredo, Texas. Demonstrators, seeking justice for victims of forced disappearances linked to criminal organizations, have vowed to stay until they meet with officials? (more on Freight Waves ).
???? French rail unions have announced two rounds of strikes, including a 37-hour walkout starting November 20 and indefinite rolling 24-hour strikes from December 11, protesting the planned split of freight operator Fret SNCF into two companies (more on Load Star ).
???? Hans Leo Cadac, Secretary of the Philippines Department of Migrant Workers, reported that around 4,687 Filipino seafarers continue to work in high-risk areas, with 740 facing attacks in regions like the Red Sea and Gulf of Aden. Philippine government agencies have implemented support measures for affected seafarers (more on Sea Trade Maritime ).?
?? Ricaurte Vasquez, head of the Panama Canal Authority, warned that President-elect Trump’s proposed 60% tariff on Chinese imports could disrupt U.S.-China LNG trade, impacting shipments through the Panama Canal. While LNG traffic through the canal has declined due to drought-driven route changes, the ACP aims to regain this traffic by 2025 (more on Freight Waves ).??
That is all for this week, but make sure to follow Auba to stay up to date on all things supply chain and logistics