According to polls, the race for the White House is very close between Vice President Kamala Harris and past President Donald Trump. This means that small changes in the economy could swing the race one way or the other.
Andrew Lokay, an expert at Beacon Policy Advisors, says that the dockworkers’ strike on Tuesday could cause a pretty big problem for the economy, which could have big effects on the election.
Lokay wrote in a Friday client note, “A work stoppage by dockworkers threatens to knot up supply chains just weeks before Election Day. This could cause prices to go up and bad economic news for Vice President Harris’ presidential campaign.”
He also said that the ports that could be impacted handle 68% of U.S. containerised exports and 56% of imports, which means that the economy will lose $5 billion in activity every day that workers are on strike.
“When we could have half of the country’s ports close down, the economic impact is like a tsunami,” Margaret Kidd, an associate professor of supply chain and logistics at the University of Houston, told MarketWatch earlier this week.
A strike would be especially hard on companies that make cars, like Ford Motor Co. F 0.94% and General Motors Co. GM 1.46% in the U.S., as well as on farm companies, like Dole Plc. DOLE 0.78
What’s going on is especially tough for the Biden-Harris government, which has marketed itself as the most union-friendly in history.
Earlier this month, people in the administration told Reuters that President Joe Biden has no plans to use the Taft-Hartley Act, which would let him ask the court for an 80-day break before a work stoppage can happen.
“Biden’s ability to push for a deal between the union and port management is lessened by his decision not to use Taft-Hartley authority,” Lokay said. “This limits what he can do, and since Congress is on break until after Election Day, all eyes will be on the White House to figure out what to do.”
Price rises or product shortages caused by the strike would definitely be promoted by Donald Trump’s presidential campaign, since he uses inflation as the main reason why he doesn’t like how the Biden-Harris administration is running the economy.
Lokay says that the event makes it clear that “traditional union support of Democrats is not as strong as it once was.”
He said that some regular union members are just as likely to vote for the Republican ticket, even though Republicans have a past of being against organised labour. So, stopping a strike could be either an expensive slap in the face to labour that makes it even more likely to support the GOP, or it could be a smart move that shows unions are losing their ability to change election results.
Lokay said that Georgia is the only swing state with a big port that could be affected by the strike. However, the whole country could feel the effects of a long strike on the economy.
“Harsh will pay more politically the longer the strike lasts,” Lokay wrote. “The White House could change its mind about Taft-Hartley in the end if the strike isn’t resolved quickly. It’s not impossible.”
