A possible strike by longshoremen next Tuesday would add uncertainty to the 2024 presidential campaign, create a new sense of uncertainty in the U.S. economy and threaten key battleground states from Georgia to Michigan. can be felt directly.
Much of the uncertainty depends on how much and for how long the impacts will be felt.
“If this situation continues for more than a few days, or even a week, there will be significant cascading effects,” Flexport founder and CEO Ryan Petersen said in a recent appearance on Yahoo Finance. “15% of the world’s container ships could be affected by the outage.”
“This is a significant reduction in production capacity,” he added.
If negotiations between unions and port operators remain stalled in the coming days over a complex set of wages and automation, the closures of Georgia, North Carolina, and other major ports on the East and Gulf Coasts could There is a possibility that the people’s sense of economic insecurity will increase. problem.
The back-and-forth is already impacting the complex politics of unions in the 2024 election, amid a concerted effort by Donald Trump to win over workers.
Read more: What the 2024 campaign means for your wallet: Yahoo Finance’s presidential election guide
If shipments of cars and auto parts are delayed, economic problems could quickly spread to other parts of the country, including Michigan, which has a say in November’s elections.
But shipping experts say President Joe Biden could be drawn into a direct conflict and forced to intervene to temporarily keep workers on the job.
“With the election so close, President Biden has little choice but to intervene and invoke the back-to-work bill, despite prior denials,” Capital Economics’ Bradley Sanders wrote in a recent note. I strongly suspect that this is the case,” he wrote.
Such a step would create an 80-day “cooling-off period” that could shelve most, if not all, issues until after Election Day.
The White House says such a move is not on the table but is becoming increasingly embroiled in conflict.
On Friday, Transportation Secretary Pete Buttigieg, Acting Labor Secretary Julie Su and National Economic Council Chairman Lael Brainard met with port operator U.S. Maritime Alliance to “send the necessary message,” White House officials said. “I told him.” It’s about coming to the table and negotiating honestly, fairly and quickly. ”
The same message was also delivered to unions, they added.
Will Biden intervene?
Perhaps the key question now is what role the Biden-Harris administration will ultimately play, beyond the negotiations themselves between the International Longshoremen’s Association and the United States Maritime Alliance.
the story continues
The White House has taken a wait-and-see attitude in recent weeks, insisting that using executive powers to delay the strike is not on the table.
“We have never asked Mr. Taft Hartley to break the strike, and we never will,” White House officials said Friday, referring to a 1947 law that gave the U.S. government more power to intervene in labor disputes. I’m not thinking about doing that,” he added.
Changing course is an option that risks angering union leaders, but several experts say the White House may soon be left with few options.
Jason Miller, a supply chain management professor at Michigan State University, wrote in a recent Yahoo article: “My base case is that it would be over within a few days, but I find it hard to believe that the Biden administration won’t invoke the Taft-Hartley Act.” I want to,” he added. Financial interview.
But even if workers are sent back to work without a deal, there is no guarantee that things will go smoothly during that 80-day interim period.
“We expect some slowdown during that period,” Miller added.
cascading economic effects
Ports from Massachusetts to Texas could be affected by the strike, but the one receiving the most political attention is Savannah, Georgia, which is located in a key battleground state and transports large amounts of cargo. and the port of Wilmington, North Carolina.
Smaller ports in Brunswick, Georgia, and Morehead City, North Carolina, could also be affected and are already developing contingency plans.
Wolf Research’s Tobin Marcus called the strike a potential “October surprise” in a recent note to clients, and said Friday that “if it drags on, it could become a big problem for Harris.” There is,” he added.
However, despite the impending strike and the regular movement of candidates near these ports, so far no breakthrough has been achieved in the campaign process.
Donald Trump traveled to Savannah this week. He commented on the city’s port but did not consider the labor dispute.
“With a world-class port and a world-class workforce, this city will soon be one of the major export hubs on the planet,” Trump said in a manufacturing pitch.
Similarly, the Harris campaign and the national Democratic Party have so far said little about the possibility of a strike.
But that could change quickly if there is confusion and Democrats try to convince voters to be good stewards of the economy. The October 1st deadline for new contracts is also auspicious, as it falls on the same day as next Tuesday’s vice presidential debate.
Another wild card is the ongoing battle over union votes between Harris and Trump, with the former president making a concerted pitch to union members and leaders to cut into the traditional Democratic Party. are.
Harold Daggett, head of the longshoremen’s union that is in the midst of the current talks, has also attracted attention for his aggressive tactics and willingness to engage in direct politics.
“Where is the President of the United States? He’s not fighting for us,” Daggett said in a recent video.
Regarding negotiations with port operators, he added: “We’re going to shut them down to prove that we can beat them.”
Ben Werschkul is Yahoo Finance’s Washington correspondent.
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