With Joe Biden’s victory in the election now confirmed by the US Congress and his inauguration scheduled for 20th January, it’s time to look ahead to the major changes that Biden’s presidency will surely bring.
How will the Biden-Harris administration impact supply chains in the U.S. and across the globe?
1. Increased support for American industry
The importance of onshoring or reshoring American manufacturing is one thing Biden and Trump appear to agree on.
Biden has pledged to invest $400 billion into U.S. products through federal government procurement, close waiver loopholes, and establish a transparent process for all bidders and stakeholders to see. This policy will include a particular focus on supporting small and minority-owned businesses.
Biden’s Made in America proposal also promises $300 billion in subsidies for research and development, and several tax incentives to promote onshoring
These policies are designed to boost the manufacturing industry in the U.S. and create American jobs.
2. A renewed focus on climate change and sustainability
Biden’s administration is expected to radically transform the U.S.’ climate policy and sustainability efforts.
His Build Back Better plan will see federal government procurement driving the U.S. towards 100% clean energy and zero-emissions vehicles, ensuring all government buildings are more energy-efficient, and mandating that public companies share details on climate risks and greenhouse gas emission within their supply chains and operations.
Under President Trump’s rule, regulations for offshore drilling have been rolled back, fuel economy standards in the automotive industry were delayed, and the U.S. withdrew from the Paris Agreement. Biden is expected to reverse these changes with an investment of $2 trillion within the next four years.
3. Securing critical supply chains
The COVID-19 pandemic has served to highlight the importance of establishing robust and resilient supply chains to mitigate the disruption associated with stockouts, changes in consumer demand, political instability, border closures, and transportation delays.
Biden is committed to making sure the U.S. does not face shortages of critical products, including PPE, during times of crisis.
“While medical supplies and equipment are our most pressing and urgent needs, U.S. supply chain risks are not limited to these items. The U.S. needs to close supply chain vulnerabilities across a range of critical products on which the U.S. is dangerously dependent on foreign suppliers,” Biden’s website reads. “America needs a stronger, more resilient domestic supply chain in a number of areas, including energy and grid resilience technologies, semiconductors, key electronics, and related technologies, telecommunications infrastructure, and key raw materials.”
A key strategy for safeguarding U.S. supply chains will be to reduce the country’s dependency on China and Russia for critical supplies and open new markets to U.S. exports.
4. Stabilising international trade
Biden is expected to take a more stabilising and restorative approach to international trade, in comparison to Trump’s hard-line one.
The incoming president will likely attempt to block China’s dominance on the world stage and focus on building mutually beneficial coalitions with alternative nations in advantageous locations. With regards to China, in particular, Biden has not committed to removing tariffs or joining trade pacts.
Biden has spoken in support of the United States-Mexico-Canada Agreement (USMCA) and it is assumed he backs the continued success of the World Trade Organization. Further trade agreements could be in the works. For example, it’s possible that in developing a trade policy in Asia Biden may look to establish a Trans-Pacific Partnership.