On the 5th of November 2024 one of the world’s superpowers, the United States of America, held their quadrennial election. Democrats and Republicans streamed to polling stations throughout the fifty states and Washington, D.C to make their voices heard and nominate the “leader of the free world” until 2028.
Despite many thinking the results would takes days to be confirmed and corroborated, the Republican nominee, Donald J. Trump, took the stage late in the evening on the 5th of November to declare his victory. The Democratic nominee, Kamala Harris, called Donald Trump on Wednesday the 6th of November to congratulate the Republican leader on his historical U.S. presidential election win.
Now it is clear that Donald Trump will be the 47th President of the USA, what are some of the impacts of this that we can expect in the Home Improvement Industry?
The Effect on Trade Policies and Supply Chains
One of the reoccurring ideas in Donald Trump’s running as the next President of the USA was the trade policies he claims he will enact as soon as he takes office, with a focus on tariffs.
What are tariffs?
In a sentence, a tariff is a tax placed on goods when they cross national borders, most commonly seen as an import tax, with a general aim of alleviating pressure from foreign competition and reducing a country’s trade deficit.
Despite the fact that these tariffs were omnipresent in Trump’s rallies, it seems many were unaware of what they were or the impacts these may have, as on the 6th of November the number of google searches for “Trump Tariff” in the USA jumped 110%.
Trumps Trade Tariffs
As shared by the BBC, “Tariffs are a central part of Trump’s economic vision – he sees them as a way of growing the US economy, protecting jobs and raising tax revenue.”
Donald Trump has previously indicated “he would impose 100% tariffs on goods from Mexico”, 60% tariffs on all goods coming in from China, and “10% tariffs on goods imported from all other countries”.
However, if Trump follows through with imposing these tariffs, as well as whether the House of Representatives or Supreme Court would support such tariffs coming into place, is still a topic of discussion.
Impact of these Tariffs
Whether these tariffs do come into play or not, the impact of these is still being debated. Many global economists believe that consumers in the USA will bear the economic burden should they be introduced, with the importing firms passing on the increased costs to the end consumer. There are two additional possibilities, that the importing firm pays the cost of the tariff without raising prices accordingly, or that the foreign exporters outside of the US lower their prices to compensate for the tariffs.
US retailers, such as the Home Depot, Lowe’s and Do It Best, might consider purchasing more products that are “Made in the USA”, which might cost more for the end consumer than products imported from around the world. To counter this, companies such as Stanley Black & Decker, with its 50 manufacturing American facilities, and 3M, which also has US manufacturing sites, might experience an increase in sales as these products would not be liable for tariffs – however, they may still have to pay import tariffs on any raw materials imported into America.
Further to this, companies that do not have a manufacturing presence in the USA might consider opening US manufacturing sites to bypass the costs of these tariffs.
In any case, if these new tariffs are imposed, USA based companies, as well as companies exporting to the USA, will have to re-evaluate their supply chains.
The Impact on the Environment
“Drill, Baby, Drill”
Although first used in 2008, Trump has been an advocate in the above, sharing the quote in question numerous times in his campaign trail. Through this, Trump is demonstrating his support in promoting what he calls “liquid gold” – US oil.
Climate Change as a Global Cause
In November 2020, during his first Presidency, Trump withdrew the USA from the Paris Climate Agreement. Although this move was quickly reversed by Biden, Trump has once again strongly suggested he would remove the USA from the agreement.
Further to this, it has been claimed that Trump believes that climate change is a hoax, and dismisses the plentiful environmental threats of climate change, despite many of these already being experienced today through increased frequency and ferocity of natural disasters. This idea was recently reinforced with Trump naming Chris Wright, a climate change sceptic and fracking pioneer, as his pick to lead the US Energy Department.
Questions also remain about the future participation of the USA in the COP29, with some sources claiming Project 2025 calls for the U.S. to withdraw from the U.N. Framework Convention on Climate Change.
Climate change is viewed as an international cause, and with the election of Donald Trump, environmentalists, activists, campaigners and scientists around the world are debating the impact this will have the fight to keep global warming below 1.5 degrees. The USA might not be the most polluting country globally, but the average American is responsible for nearly twice as much climate pollution as the average person in China.
Therefore, questions are beginning to arise regarding how to best compensate for the potential loss of the USA in this global cause.
In these early stages, it is difficult to determine the potential impacts of the upcoming Donald J. Trump Presidency on the Home Improvement industry internationally. There are a number of uncertainties in regard to what types of policies, approaches and relationships will be forged or forgotten in this new term.
However, should Donald Trump continue the mandates he set out in the run up to the election, which currently seems to be the case, we can assume that restrictive tariffs and a lack of concern for the environment, both locally and globally, will play a large role in US politics, impacting the Global Home Improvement industry greatly in the next 4 years, with potential repercussions felt long into the future.