Port strike could come at a 'high political cost' for Harris campaign
By Chris Matthews
The affected ports process more than half of all containerized exports and imports
Polls show Vice President Kamala Harris and former President Donald Trump in a tight race for the White House, setting up a situation where small economic disturbances could tilt the race one way or another.
A rather large economic disturbance could result from a dockworkers strike set to begin on Tuesday, with major implications for the election, according to Andrew Lokay, analyst at Beacon Policy Advisors.
"A work stoppage by dockworkers threatens to knot up supply chains only weeks before Election Day, which could raise prices and bring bad economic headlines for Vice President Harris' presidential campaign," Lokay wrote in a Friday client note.
He added that the potentially affected ports process 68% of U.S. containerized exports and 56% of imports, setting the economy to lose $5 billion in economic activity for each day that workers are on strike.
"The economic impact is a tsunami when we potentially have half of the country's ports closing down," Margaret Kidd, associate professor of supply chain and logistics at the University of Houston, told MarketWatch earlier this week.
A strike would be particularly difficult for the automotive sector, including U.S. firms Ford Motor Co. (F) and General Motors Co. (GM) as well as agriculture firms headlined by Dole Plc. (DOLE)
The situation is particularly difficult for the Biden-Harris administration, which has promoted itself as the most union-friendly administration in history.
Administration officials told Reuters earlier this month that President Joe Biden doesn't plane to invoke the Taft-Hartley Act, which would enable him to seek a court order for an 80-day cooling off period before a work stoppage may begin.
"Forswearing the invocation of Taft-Hartley authority weakens Biden's leverage in being able to negotiate a deal between the [union] and port management," Lokay said. "This limits his options and with Congress on recess until after Election Day, all eyes will be on the White House to address the situation."
Donald Trump's presidential campaign would surely advertise any price increases or product shortages that result from the strike, given that inflation is the centerpiece of his argument against the Biden-Harris administration's handling of the economy.
The incident brings into relief the fact that "traditional union support of Democrats is not as strong as it once was," according to Lokay.
Some rank-and-file union members are just as likely to support the Republican ticket, despite its history of antipathy toward organized labor, he noted. Therefore angering workers by blocking a strike could either be a costly rebuke of labor that further drives it into the arms of the GOP, or a canny move that recognizes the waning power of unions to affect electoral outcomes.
Lokay pointed out that Georgia is the only swing state with a major port that could be affected by the work stoppage, though the economic cost of a prolonged strike could be felt across the nation.
"The longer a strike goes on, the higher the political cost for Harris," Lokay wrote. "It's not out of the realm of possibility that the White House could ultimately change tack on Taft-Hartley if the strike is not resolved quickly."
-Chris Matthews
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
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09-27-24 1049ET
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