Some experts say that prices may rise before the end of the year, affecting goods during the upcoming holiday season. This tragic situation has arisen at a time when consumers are beginning to feel some relief from inflation, according to a report by the American Fox Business Network.
The International Port Workers Association (ILA) negotiates on behalf of 45,000 workers at US ports from Maine to Texas, which collectively handle about half of the country’s seaborne imports, the report noted.
The association warned that its members are prepared to stop work if they do not obtain a new contract by the October 1 deadline.
The Retail Industry Leaders Association (RILA) said in a statement, “Retailers view this strike and its impending disruption as a self-inflicted wound to the American economy.”
5 billion dollars daily
According to the report, JPMorgan estimated that for each day that the ports remained closed, it would take about six days to settle the arrears. Analysts also estimated the economic impact of the strike at about five billion dollars per day, according to a research note published earlier this month.
The American Network report indicated that the Retail Manufacturers Association said that although retailers have developed contingency plans to reduce the effects of the strike, the longer the work stoppage lasts, the more difficult it will become to do so.
The network quoted a number of experts as confirming that this type of disruption in shipping and supply chains often leads to a shortage of products, which leads to higher prices.
It was reported that Cody Moore, partner and wealth advisor at the wealth management firm Wealth Enhancement & Prevention, said:
- If these strikes cause prices to rise, it could lead to higher inflation (again).
- This may delay the Fed from cutting interest rates further.
- This delay could ultimately impact consumer costs for things like mortgages, car loans and credit cards.
The network also quoted the CEO of Salson Logistics, Jason Fisk, as saying:
- Shoppers should prepare for higher commodity prices by the first quarter of 2025, or perhaps even earlier.
- Importers are actively implementing strategies to manage these risks, but these solutions often come with their own high expenses, which inevitably impacts consumer prices.
- Discretionary products, especially luxury goods and leisure goods, are expected to be more affected due to their higher price elasticity.
- While the full impact of the strike remains unclear, “significant repercussions” are expected such as “stock-outs at retail stores and slowed factory operations, especially with the busy holiday season approaching.”
Major economic cost
For his part, the former advisor to the US State Department, Hazem Al-Ghabra, confirmed in exclusive statements to the “Eqtisad Sky News Arabia” website that there are major economic concerns about a possible strike by port workers in the eastern and southern sides, or the so-called American Gulf, noting that, according to J. According to JPMorgan, the cost of this strike could exceed $4.5 billion per day in economic loss.
He stated that there are fears that the potential strike will cause an increase in inflation rates, but at the same time it is a strike due to inflation and the workers’ lack of income of an appropriate value, as they are trying to reach the fulfillment of their demands through pressure by threatening to strike, stressing that the Port Workers Association is trying to obtain Better income and benefits for these workers.
He stated that the timing of this potential strike is very important as it comes during a period of presidential elections, noting that the strikes of this group of workers are governed by an American law issued since 1947 that gives the president the authority to cancel this strike due to national security and economy, but in this electoral and political situation in the states. United They believe that the Biden administration will not be hasty in making a political decision to cancel the strike and resolve the crisis in a forced manner.
He said that the main question now must focus on the position of President Joe Biden’s administration regarding this potential strike, explaining that there are several scenarios:
- The Biden administration should send a clear message that it will intervene to cancel the strike project, which will have a positive and negative impact in left-wing democratic circles on Kamala Harris’ chances of success in the presidential elections.
- For the Biden administration to wait and distance itself, and this may lead to the US presidential elections being held in light of exacerbated economic problems, which is a difficult situation for the Biden administration.
He explained that these ports work on export and import, especially since some of the American goods are not available, so the goods that the American market needs will also face problems in reaching the markets, noting the spread of news about empty shelves in stores.
He warned that such strikes at ports would affect supply chains and restore some of the atmosphere of the Corona pandemic crisis, explaining that the United States of America may be able to manufacture cars within it, but it needs electronic chips that come through the ports, which are mainly relied upon in manufacturing. For example.
He added that this strike may cause the automobile industry to stop due to the inability to import certain parts, and to stop the movement of maritime freight, stressing that strikes of this type have unexpected bad effects on a wide segment of the economy and its sectors.
Difficult confrontation
In addition, Hanan Al-Badri, the founding member of the Washington Strategic Group and an expert in American policies, confirmed in exclusive statements to the “Eqtisad Sky News Arabia” website that the port workers’ crisis threatens the American economy as a whole, especially in light of this important and sensitive time for the United States, which is approaching a measure. Presidential elections.
She added that both the Republican candidate and the Democratic candidate are trying to prove their ability regarding the economic file and improve its conditions, especially since it is the most important thing for the American voter.
She said that there are 45,000 people who represent the International Port Workers Association and have reached a dead end after the failure of their negotiations regarding their wages and labor benefits, which threatens the American economy. She explained that:
- There are fears that the United States could lose approximately five billion dollars a day if this strike begins, which affects US ports from the south in Texas to Maine in the north.
- The potential strike did not only affect the American economy or the shipping process directly, but it will affect all aspects of life, including retail trade, the automobile industry, and the goods that reach the United States in addition to those that are exported from it.
She stated that the US government is facing a difficult confrontation with an association representing American workers, and expected the following:
- An attempt should be made to reach an urgent solution before the election date approaches, in order to avoid expected losses.
- If the specified date is not reached, or at least an understanding is reached with the Association on another date within days, it is expected that life in American ports will stop, which is almost certain.
- The domestic product is expected to be affected and cause losses expected to range between $4 billion to $8 billion per week.
- If this strike is implemented five weeks before the US elections, it will also affect the global economy and trade.
She pointed out that many American companies that rely on factories outside American territory have postponed shipping operations at a very sensitive time for trade, as many goods related to American holidays are usually shipped at this time every year, in order to avoid incurring further losses if the ships do not arrive. Empty it, which will cause a disaster if a solution is not reached and the strike process is stopped.
She stressed the need for an agreement to be reached to cover the so-called social contract or reassure workers in American ports about their future, not only by approving the financial claims and benefits they demand, but also reassuring them in a practical way that they will not be greatly affected by the process of replacing many jobs with robots and artificial intelligence. Which they do in various ports around America.
Harris in the picture!
In turn, international relations expert, Ayman Samir, said in statements to the “Eqtisad Sky News Arabia” website that these potential strikes by port workers’ unions at this time, that is, a few weeks before the presidential elections on the fifth of next November, “are greatly harmful to the candidate Kamala Harris and the Democrats.” “, explaining that:
- Workers are now seeing that the Democrats did not fulfill their promises during four years of Joe Biden’s rule to workers, specifically port workers.
- Donald Trump could exploit this issue a few days before the elections, as workers object to the positions of the government in power represented by Biden and Harris, and thus it is in Trump’s favor as he is a strong competitor on this particular issue.
- Trump’s call to raise customs duties on all goods coming to America with the aim of supporting American industries comes to the benefit of workers, as he is courting them through trade unions, which historically lean toward the Democrats.
- But although some unions have declared their political position in support of Democrats, these strikes and demonstrations make it likely that there will be a different vote for workers than their known position.
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