The U.S. presidential election is upon us. Incumbent Republican Donald Trump and Democrat Joe Biden have voiced their campaign promises and pledged to navigate the nation’s recovery after being flipped upside down by a global pandemic. As we anticipate the results in the coming days, a decision on either side of the ticket will have implications for the strategies of shipping organizations across the country.
Each candidate’s political agenda stretches far beyond supporting critical supply chains and advocating for low consumer costs as the country works through a period of economic recovery. Here we compare 2020 candidates and their political policies as they pertain to shippers, transportation, energy, and the broader supply chain industry.
For a high-level synopsis, see below for a chart comparing the policies of each presidential candidate:
PRESIDENTIAL CANDIDATE POLICY COMPARISON: ENERGY
The 2020 election will help shape global energy markets for the next four years. If President Donald Trump is re-elected in November, the Republican Party is expected to maintain its strategy of sustaining the U.S.’ energy dominance. Trump’s focus on energy security, abundance, and expansion has fostered the nation’s ability to become a net energy product exporter and the largest crude oil producer on the planet. This—among other factors—has solidified the U.S.’s position as a critical linchpin in the world energy ecosystem.
President Trump plans to continue to support fracking as a means of crude oil and natural gas extraction. Additionally, he believes the continued use of more cost-friendly, conventional fossil fuels in transportation and power generation is in the nation’s best interests. This is because it adequately aligns with the party’s goal of growing the domestic energy sector and avoids the financial risk of adopting a more renewable-centric energy roadmap.
Like President Trump, Joe Biden also acknowledges that the U.S.’ energy market authority is one of its most valuable assets. Certain members of the Democratic Party support fracking and will double down on growing the domestic energy sector. Biden’s team, however, will work to strike a balance between expanding fossil fuels and scaling the adoption of renewables, with a goal of 100 percent renewable electricity by 2035. Biden announced a pledge to end new drilling on federal property and more closely monitor energy production emissions, both of which could have consequences for oil and gas companies.
Key Energy Policy Takeaways:
- If President Trump is brought back for a second term, shippers and the transportation industry can expect more of the same from an energy standpoint.
- Conventional fuels will likely hold precedence over alternative energies, regardless of their environmental side effects. That is not to say private sector efforts centered on growing the utilization of renewables will stall, but federal support will not focus on growing the renewables industry.
- Joe Biden would likely work to diversify the U.S. energy portfolio.
- Cleaner, more sustainable fuels would become a priority, ultimately coming with cost implications for shippers moving goods to market. Biden’s ambitions would require significant resources and would not be an overnight transition, but his administration would install energy policy with long-term, climate-focused targets.
PRESIDENTIAL CANDIDATE POLICY COMPARISON: CLIMATE AND ENVIRONMENT
Policies surrounding emissions reduction and sustainability have progressively become a cornerstone of corporate strategies and infiltrated conversations among the world’s most influential voices. Public perception, technology, and policies have evolved to keep pace with the global push to lessen the carbon footprint, but the Trump Administration has hindered the U.S. in fully joining this movement.
Trump’s decision to abandon the Paris Agreement put the U.S. on an island in terms of its unwillingness to collaboratively push to combat climate change. The Trump Administration recognizes that emissions reduction is necessary, but the U.S.’s participation in the Paris Agreement threatened the country’s competitiveness.
Similarly, President Trump decided to roll back automakers’ fuel economy requirements from a standard previously set by President Obama. This was primarily pointed at consumer passenger vehicles, but the ideals ingrained in the decision carry over to commercial transportation, too. Trump’s strong opposition to the Green New Deal and overall disinterest in carbon pricing programs also reinforces his lack of attention toward national climate legislation.
Climate policy is perhaps where Biden and Trump differ the most, with Biden introducing a ‘Clean Energy Revolution’ framework to have the U.S. become a net-zero emitter by 2050. Many are asking, will Biden rejoin the Paris Agreement, to which he has been vocal about doing immediately after inauguration. Furthermore, Biden would likely reinstate the fuel economy standards previously rolled back by Trump, all in a push to rebuild the U.S.’s sustainability reputation. Biden also agreed to the exploration and rollout of more carbon capture funding opportunities and carbon pricing mechanisms for involved parties, like shippers and the transportation sector.
Key Climate and Environment Takeaways:
- Trump and Biden’s differing viewpoints on national climate initiatives leave supply chains in limbo.
- President Trump’s climate stance is rooted in more independent, legacy foundations that lack cooperation with other global sustainability leaders. The U.S. has taken steps forward but has been more resistant to widespread change in recent years.
- Biden is likely to make climate policy one of his top concerns should he be elected. Rejoining the Paris Agreement, allocating more resources toward legislation like the Green New Deal, and more initiatives centered on carbon reduction and fossil fuel displacement are all in play.
- A potential carbon pricing program for fossil fuels would come with increased costs for shippers, but also pose an opportunity to explore alternative energies.
PRESIDENTIAL CANDIDATE POLICY COMPARISON: INFRASTRUCTURE
There is bipartisan support for massive infrastructure legislation, but funding remains the biggest roadblock. President Trump has not shied away from publicizing the nation’s need for new and improved transportation infrastructure, as evidenced by his proposed $1 trillion bill earlier this year. In addition to roads, bridges, airports, and the like, Trump has also remained open to funding electric vehicle infrastructure on a targeted basis. This comes despite his decision to cancel tax credits for electric vehicle buyers, as his administration is more so looking for ways to create jobs and stimulate the economy amidst the current downturn.
Biden’s position on infrastructure funding fundamentally echoes that of President Trump, but with even more aggressive plans to fund existing projects. Joe Biden promises second great railroad revolution, as quoted by him, by enhancing our rail network to accommodate more public and freight transportation. He believes this will not only create jobs and provide the economy with stable footing, but also lower emissions and fossil fuel consumption.
In total, Biden’s infrastructure mindset is more progressive than the opposing party. Things like smart electricity grids, more advanced efficiency technology, and aggressive electric vehicle funding just scratch the surface of things that Biden has discussed throughout his campaign.
Key Infrastructure Takeaways:
- Both parties hope to execute an infrastructure plan best suited for economic expansion.
- How to fund these undertakings—especially during a time when tax revenue is low—remains the biggest wild card.
- The largest infrastructure-related impact for shippers from an operational and cost perspective is the electric vehicle and alternative energy infrastructure proposals that each party brings to the table.
PRESIDENTIAL CANDIDATE POLICY COMPARISON: FOREIGN POLICY
Trump’s decision to withdraw from the Iran nuclear deal, enforce an almost-total economic embargo, and sanction oil exports set a course that will likely continue if re-elected. The Trump Administration’s mounting pressure on Venezuela’s energy industry supply chain and the President Maduro regime have also sensitized U.S. relations with Venezuelan allies. U.S. relations with Iran and Venezuela, in addition to Trump’s willingness to publicize negotiations with entities like The Organization of Petroleum Exporting Countries, make geopolitics an overhanging risk. Trump’s nationalist approach to trade, tariffs, and restructuring trade pacts altogether are also expected to follow him if his presidency is extended.
Aside from piggy-backing Trump’s pressure on Venezuela, Biden’s foreign policies are quite different and more uncertain than our current president. Biden is open to rejoining the Iran nuclear deal to rebuild relationships in the Middle East and is a strong advocate for more liberalized trade frameworks. Biden hopes to use more targeted blueprints to ensure free, fair, and legal trade is executed internationally, as opposed to maintaining the broad tariffs imposed by Trump. In total, upholding U.S. trade relationships with countries like China and restoring support for frameworks like NATO is likely to be at top of mind for Biden.
Key Foreign Policy Takeaways:
- Supply chains across various industries could feel the effects of foreign policy due to the interconnectedness of the world we live in.
- S. relations with countries involved in the energy sector, trade developments with key partners, and the frameworks supporting the fluidity of international collaboration will follow our next president’s direction.
- Either way, all components of global supply chains will either directly or indirectly feel the impact of foreign policy decisions from a logistics, cost, or relationship standpoint.
Looking Beyond 2020’s Presidential Election
Of additional note, the Senate race will be a key decider of what policy advancement or infringement looks like, regardless of which candidate takes office. Currently, 35 seats will be voted on come November. Control of the Senate will go a long way to fortify or impede presidential agendas.
This year’s presidential race and each candidate’s political aspirations will surely affect the transportation and supply chain industries, considering supply chains are all around us and transportation is constant. This will leave shippers faced with repercussions from an operational and cost perspective, but the magnitude of change will depend on the administration in office come January 2021. We do not yet know who will be leading the U.S. through this extraordinary stretch of uncertainty, but we do know tenets of each candidate’s energy, climate, infrastructure, and foreign policies will be transformational.