The Impact of Trump’s Re-Entry on the U.S. Freight Industry

With Trump winning the election in a landslide, this makes him only the second president in U.S. history to be successfully re-elected after losing an election. Based on the regulations that were put in place during his first term, as well as the policies that were promised for his second term, there are significant implications for the freight industry.

Trade Policy Changes

The reinstatement or introduction of new import tariffs, particularly from countries such as China, where Trump stated before his election that if he were elected president, he would impose a 60% tariff on all U.S. imports from China and a 10%-20% baseline tariff on all U.S. imports, could lead to changes in the supply chain. Freight companies may see changes in import volumes and need to adjust their routing and logistics strategies.

Revisiting trade agreements such as the USMCA could impact cross-border freight operations with Canada and Mexico, potentially altering the flow of goods and regulatory compliance requirements. In October, truck traffic along the U.S.-Mexico border hit an all-time high, thanks in part to tariffs.

Infrastructure investment

The focus on infrastructure development is likely to improve roads, bridges and ports, benefiting the freight industry by reducing transit times and transportation costs. This could also increase demand for transportation of construction materials.

Regulatory Adjustments

Changes in regulations related to emissions, safety standards, or labor laws could affect operating costs and compliance burdens for freight carriers. Rollbacks of certain regulations may reduce costs, while stricter regulations may increase costs.

Weakening Environmental Regulations for Trucks

Trump's first administration rolled back major environmental regulations. During his first term, he notably weakened vehicle emissions standards and clean energy rules, and opposed California's vehicle emissions regulations.

After Trump's first term, the Biden administration rolled out significant new emissions standards, including the controversial Stage 3 greenhouse gas emissions standards for heavy-duty trucks (GHG3), which were overwhelmingly criticized by the trucking industry. Because this represents a limitation on the effectiveness of certain trucks for transportation due to emissions issues, Trump's presidency is likely to weaken environmental regulations once again.

Promoting Domestic Manufacturing

In order to not be overly reliant on imported goods, policies may be proposed to encourage domestic manufacturing and increase the demand for domestic freight services as more goods are produced and consumed within the U.S., which may benefit the trucking and railroad sectors.

Supply chain diversification

Companies may diversify their supply chains to mitigate the risks associated with potential trade tensions, which could affect international freight transportation patterns and increase demand for logistics services that support complex supply networks.

Labor market impacts

Adjustments in immigration policy could affect the supply of labor in the freight industry, particularly in sectors such as truck drivers and warehousing, which could lead to labor shortages or changes in wage structures.

According to data released by the Biden administration, an estimated 3 million immigrants encountered at the southern border have remained in the United States since January 2021, when Biden took office. Trump is expected to follow through on his campaign promise to launch the largest deportation of undocumented immigrants “in U.S. history,” which will likely result in a temporary labor shortage.

For the freight industry, the end result will be an increase in freight volume. Tariffs will only increase inflation with little direct economic benefit.