With the upcoming election right around the corner, we’ve been asked by many business owners who are immersed in international trade how its outcome will affect their bottom lines. In this article, we break down what you need to know and what steps you can take to protect your business in any outcome. 

What’s at Stake?

Whether your business imports raw materials, exports goods, or relies on overseas suppliers, two core drivers—exchange rates and commodity prices—are set to fluctuate in 2025. Here’s a look at both possible election outcomes and their effects on these crucial areas.

The Two Scenarios

1. If Trump Wins

Businesses could face several challenges and opportunities:

• Currency Fluctuations:

  • The US dollar would likely strengthen across the board, particularly against currencies like the Chinese yuan, Korean won, and Indian rupee. Other major currency pairs like the EUR, GBP, CAD, and AUD would also experience depreciation against the dollar.

  • This dynamic means that while imports from these regions would become cheaper, exporters would face more challenging market conditions as US goods become less competitive abroad.

    
    

• Commodity Price Shifts:

  • 25-50% rise of base metal prices such as steel and aluminum due to tariffs and resulting supply shocks, adding substantial cost pressure on manufacturers

  • Lower energy prices driven by increased domestic production

  • Agricultural products could see volatility due to heightened trade tensions.

    
    

• Trade Policy Adjustments:

  • Expect a resurgence of tariffs, particularly on Asian imports, and a strong emphasis on fostering domestic manufacturing.

  • Trade tensions with China and Europe could escalate, creating uncertainty around international partnerships and cost structures.

2. If Harris Wins

Businesses would see different economic conditions:

• Currency Impact:

  • A weaker, more stable US dollar, which could help exporters by making US products more affordable abroad, but also raise costs for businesses that rely on imports.

    
    

• Commodity Trends:

  • Strong demand for metals such as copper and lithium, driven by the administration’s focus on green energy and electrification.

  • Traditional energy costs, such as oil and gas, could rise due to reduced domestic production or tighter regulations.

  • Agricultural products are likely to enjoy more predictable pricing, with fewer trade conflicts, and stronger international cooperation.

    
    

• Trade Policies:

  • A Harris administration would prioritize international cooperation, stability, and environmental standards. Trade rules would be more predictable, though possibly stricter.

Why This Matters for Your Business

Think about your business operations:

• Do you import materials or products from Asia?

• Do you export to international markets?

• Do you use steel, aluminum, or other industrial metals?

• Are energy or agricultural commodities key to your business?

If you answered yes to any of these questions, your costs could change significantly after the election. The value of the dollar, the price of key commodities, and international trade policies could all shift, impacting your bottom line.

Scenario Analysis: A Real-World Example

Imagine you're a business importing $1 million worth of materials annually from China. Here’s how the scenarios break down:

• Under Trump: A stronger dollar would reduce your import costs, but increased tariffs and higher commodity prices could drive up your costs by 25-50%.

• Under Harris: The dollar might weaken, making imports more expensive, but your business could see more stability in commodity prices.

No matter who wins, it’s critical to take action to protect your business from these potential shifts.

How Pillar Can Help

Pillar offers fully automated risk management solutions to protect your business from currency and commodity volatility:

1. Currency Protection:

   Automated hedging strategies with real-time monitoring and execution tailored to your exposure, offering protection from sudden swings in exchange rates.

   
   

2. Commodity Price Management:

   Customizable hedging programs that guard against price spikes in metals, energy, or agricultural commodities, helping to minimize cost uncertainty.

Take Action Now

Here’s how you can safeguard your business with Pillar:

1. Next Week: Start with a free risk assessment from Pillar, helping you identify your exposure to currency and commodity risks.

2. Next 30 Days: Implement protection strategies and set up automated monitoring systems.

3. Long-Term: Conduct regular risk reviews, adjust your hedge positions dynamically, and optimize your hedging programs based on evolving market conditions.

The Bottom Line

The 2024 election will undoubtedly bring volatility to the markets. But you don’t need to predict the winner to protect your business. Pillar’s solutions ensure you’re covered, no matter what happens in November.