The U.S. presidential race continues to either interest or exhaust American citizens. The economy, reproductive rights, and the controversy to maintain American-style democracy are all issues that are being discussed by Democratic presidential nominee Kamala Harris and Republican presidential nominee Donald Trump. Securing the U.S.-Mexico border and addressing immigration are also hot topics of the campaign. Trump has made statements about closing the U.S.-Mexico border in order to control immigration and asylum seekers, which if implemented would severely damage the U.S. economy, as Mexico is our country’s number one trading partner.
Another portion of Trump’s rhetoric that is directly affecting the U.S. and Mexico is his stance on renewable energy and green power, notably involving electric vehicles (EVs). A major part of this political platform would involve steering the country away from EVs and more strongly supporting the fossil fuel industry. A common chant at his campaign events is “Drill baby, drill!”
An outspoken supporter of Trump is billionaire and Tesla owner Elon Musk, who is contributing to the Trump campaign, and has allowed him back on the social platform X, from which he was banned after the January 6 attempt to stop the handover of the presidency to Joe Biden, and for spreading falsehoods online. Trump’s stance towards Mexico and EVs is now directly affecting Musk.
In March 2023, Musk and Tesla announced the construction of a new Tesla plant in Monterrey, Mexico. This project, which Musk calls “Gigafactory Mexico,” was slated to involve an investment of up to US $15 billion and employ thousands of workers at final buildout. It was an attempt to ramp up Tesla’s production in North America and to keep it competitive against other EV producers, which are putting more economical models on the market. Last month, Musk announced that he was postponing the project until after the U.S. presidential elections. Stated Musk, ‘I think we have to see what happens with the election. Trump has said he will put tariffs on vehicles produced in Mexico, so it doesn’t make sense to invest a lot in Mexico if that’s going to happen. Right now, we oppose Giga Mexico.’ The irony in the Tesla-Mexico situation and Musk’s support for a candidate who essentially opposes the products his company produces is so thick that it can be cut with a knife.
It also reminds me of how projects were stalled during the presidential elections of 2016 and 2020 when Trump threatened to deal with immigration at the southern border by shutting the border down, and by canceling the North American Free Trade Agreement. I personally was involved in projects coming to the U.S. side of the border, but were canceled because of Trump’s rhetoric, which has the direct effect of impeding investments and killing jobs that were slated to be created. What is said on the campaign trail does indeed affect business.
What is not being affected is Americans’ hunger for cheap products from Asia, particularly from China. The Maritime Executive recently reported that the Ports of Los Angeles and Long Beach saw record imports in July. This was the best month in the history of the 116-year-old Port of Los Angeles, and the 113-year-old Port of Long Beach. More than a half-million containers entered the Port of Los Angeles in July, which saw an overall increase in volume of 18 percent this year compared to last year. Meanwhile, the Port of Long Beach is seeing an even higher increase of 20 percent in volume compared to 2023.
A lot of this volume increase at these West Coast Ports -the largest volume ports in the U.S. – are attributable to the unrest caused by attacks by Houti rebels in the Red Sea region. A threatened fall strike by port workers has also caused producers to push as many products as they can to the U.S. to avoid supply chain disruptions and shortages later in the year.
These forces have essentially nullified Trump’s rhetoric of imposing even more tariffs on not only China – most Chinese products are already subject to import tariffs of more than 20 percent – but on many U.S. trading partners throughout the world if elected. Producers could also be trying to enter as many products into the U.S. before the November elections. What happens to the volume growth at these ports of entry if Trump wins the election is uncertain.
It is an American political tradition of candidates hitting the campaign trail and espousing their platform. Americans want to understand what the presidential candidates stand for and what they indicate they will be doing once in office. However, until the elections conclude on November 5, what is said on the campaign trail can have negative effects.
