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ASCM Insights

If Biden Wins

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As I write this, the United States presidential race has not yet been called, but former Vice President Joe Biden is steadily closing in on the 270 electoral votes required to win. So, what would a Biden presidency mean for supply chain? Here’s what the ASCM editorial team has discovered.

International trade: Biden’s policies center on coalitions of nations that collectively trade with each other, blocking China from expanding control over the world economy. During the June debate, Biden said his administration would renegotiate with Pacific nations in order to “bring them together to hold China accountable.”

Keith Belton, founder and principal of Pareto Policy Solutions, told Industry Week that Biden clearly wants to see the World Trade Organization succeed and is “still for the United States leading the world by setting the rules for international trade.”

In the article, author Ryan Secard adds that Biden’s coalition-based trade philosophy will make it easier for small manufacturers to participate because it helps eliminate the “complex web of trade relationships” they have to navigate.

In addition, Biden has expressed support for the United States-Mexico-Canada Agreement (USMCA) and is expected to uphold the deal. USMCA incentivizes companies to build cars and trucks in North America; creates stronger labor laws; keeps tariffs on most agricultural products at zero, giving access to farmers in all three markets; helps tech companies of all sizes to compete more effectively; and allocates $600 million for environmental protections.

Domestic manufacturing: If he becomes president, Biden says he will redirect $400 billion in federal procurement toward goods manufactured in the United States and implement stricter requirements for obtaining the Made in America label. In addition, he wants to offer companies a 10% advanceable tax credit for investments toward setting up manufacturing businesses and creating jobs.

“There’s a stick to the carrot, too,” Secard writes. “Companies that offshore production and then sell products or services back to the United States will have to pay a cumulative 30.8% tax penalty on their profits.”

The tax credit proposal also focuses on modernizing facilities to cultivate leading-edge processes. “Investing in nascent technologies or products of the future is probably a better investment than trying to bring back an industry that left the United States a while ago,” Belton says.

In a year defined by a devastating pandemic, Biden also has laid out several methods to ensure the United States is less dependent on foreign suppliers and, therefore, better prepared for disruption. He aims to do this by shifting critical products to local production and enabling “surge manufacturing” during a future crisis.

“As well as deploying the Defense Production Act to direct American companies to produce greater volumes of critical products, such as N95 respirators and other items of personal protective equipment, Biden will use the 100-day review process to determine the best way forward when it comes to longer-term decision making,” Jamie Bell writes for NS Medical Devices.

Sustainability: During his campaign, Biden was sharply focused on climate change, outlining a $1.7 trillion plan to invest in clean-energy infrastructure over 10 years. A Nov. 4 Biden tweet states: “Today, the Trump Administration officially left the Paris Climate Agreement. And in exactly 77 days, a Biden Administration will rejoin it.”

As the second-largest emitter of global carbon dioxide, the United States is vital to the success of any climate-change mitigation plan. “A permanent American exit from the climate accord would be a huge blow to the international community’s ability to stave off a climate disaster,” Johnathan Shieber writes for Tech Crunch. “A year of wildfires, flooding and other climate-related catastrophes have shown how changing temperatures are already wreaking havoc on communities.”

Come together

It’s been a difficult year. The election is just the latest in a series of stressful, often alarmingly divisive, events in our lives. No matter the result, we all must remember the importance of collaboration, teamwork, and understanding and supporting each other.

Only when we stand united can we successfully align resources to strengthen networks and use supply chains to create a better world. As always, ASCM is here to support you and your organization with industry-leading education and training, partnerships, and content designed to help us all come together and emerge better than we were before.

About the Author

Abe Eshkenazi, CSCP, CPA, CAE CEO, ASCM

Abe Eshkenazi is chief executive officer at ASCM, the largest nonprofit association for supply chain and the global leader in supply chain organizational transformation and innovation. Prior to this, he was the managing director for the Operations Consulting Group of American Express Tax and Business Services. His leadership roles have included project management, business process redesign, and individual and organizational alignment. Eshkenazi may be contacted through editorial@ascm.org.

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