Tariffs, taxes and trade: The impact of Trump’s reelection on the supply chain

With former President Donald J. Trump winning back the White House, it is clear that the supply chain and freight logistics markets are in for some changes on various fronts.

The topic that received the most attention in the run-up to the election focused on tariffs, in terms of what may be coming, with Trump saying repeatedly on the campaign trail that he plans to increase the percentage of tariffs levied on companies importing into the United States, from where they have remained since they were implemented in 2018, during his first term in office. To that end, he has said he is committed to imposing a 10% to 20% tariff on all imports regardless of what country they come from, and 60% or higher on goods entering the U.S. from China.

When the Trump administration first rolled out its plan in mid-2018, it was comprised of a 25% tariff on $50 billion worth of goods imported from China, under the purview of an “America First” policy geared toward a more fair and beneficial position for U.S. companies, as well as focusing on protecting domestic property and intellectual property; stopping noneconomic transfers of industrially significant technology and intellectual property to China; and enhancing access to the Chinese market. These tariffs subsequently ignited a trade war between the United States and China that continues today.

Trump’s re-election also translates into the nation’s corporate tax rate remaining at 21%, which is notable, considering it was set to expire after 2025.

National Retail Federation President and CEO Matthew Shay recently said he has advocated for a pro-growth tax policy, referencing the 2017 Tax Act, which reduced corporate taxes in the United States from 35% to 21%. He noted that this reduction aligns the U.S. corporate tax rate more closely with, yet still higher than, the average among OECD (Organization for Economic Cooperation and Development) countries.

To read more analysis of the election’s impact, read: Re-election of Trump signals changes for global trade, supply chains, and U.S. trucking industry

SC
MR