The fallout from the U.S. longshoremen’s strike, which began on Tuesday, has brought uncertainty to the 2024 presidential campaign, created a new sense of uncertainty in the U.S. economy, and caused major battleground states from Georgia to Michigan to loom large. It can be felt directly.
Much of the anxiety hinges on how much of an impact, and for how long, the withdrawal of longshoremen on the East Coast and Gulf Coast will have.
“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.
But Americans could feel more economically insecure if negotiations stall over a series of complex wage and automation issues, leading to prolonged closures of Georgia, North Carolina, and other major ports on the East and Gulf Coasts. There is sex.
There are also big question marks over how Kamala Harris and Donald Trump will approach the strikes, with much of the campaigning in recent days focused on other topics such as the impact of Hurricane Helen. The ebb and flow is affecting the complex politics of unions in the 2024 campaign, amid a concerted effort by President 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 said President Joe Biden could become embroiled in a direct conflict and be forced to intervene to temporarily bring workers back on board.
“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 has said such a move is not on the table but is becoming increasingly embroiled in conflict.
Last Friday, Transportation Secretary Pete Buttigieg, Acting Labor Secretary Julie Su, and National Economic Council Chairman Lael Brainard met with the port operator, the American Maritime Alliance, and said, “We need to get to the table and negotiate.” ‘ conveyed the message. In good faith, fairly and promptly. ”
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White House officials added that the same message was also delivered to labor unions.
Will Biden intervene?
Perhaps the key question at the moment, other than what happens next between the International Longshoremen’s Association and the United States Maritime Alliance, is what role the Biden-Harris administration will ultimately play That is what it means.
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 invoked Taft-Hartley to break up a strike, and we have not,” 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 of doing that.”
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 ones receiving the most political attention are Savannah, Georgia, and North Carolina, which are located in key battleground states and transport large amounts of cargo. It’s a port in Wilmington, state.
Smaller ports in Brunswick, Georgia, and Morehead City, North Carolina, could also be affected and are already developing contingency plans.
In a recent note to clients, Wolf Research’s Tobin Marcus called the strike a potential “October surprise” that “could be a big problem for Harris if it drags on.” he added.
However, so far, there have still been few breakthroughs in the campaign process, even though candidates regularly move near these ports.
Donald Trump traveled to Savannah last week. He commented on the city’s port but did not mention labor unrest.
“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 national Democrats have said little so far about the strike.
But that could change quickly if there is confusion and Democrats try to convince voters to be good stewards of the economy. The start of the strike on October 1 was also auspicious timing, as it coincided with the vice presidential debate.
Another wild card is the ongoing battle for union votes between Harris and Trump, with the former president making a concerted pitch to union members and leaders to break into traditional Democratic circles. 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.”
This post has been updated.
Ben Werschkul is Yahoo Finance’s Washington correspondent.
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