BLOG

How Policy Changes Will Affect the Procurement Function in Trump Administration

Jul 20, 2017

The Trump administration won the presidency with a promise for increased employment opportunities, strengthened national security, infrastructural developments, affordable healthcare, federal and corporate tax cuts, and reduced dependency on China. After President Trump assumed his position in the White House, there have been amendments to various laws, regulations, and policies, which would subsequently have its impact on the procurement process. Most amendments are enforced to making the procurement process easier, but some of them have a negative impact on the current business scenario and pose a challenge to an organization’s Chief Procurement Officer (CPO).

Here’s a look at how the Trump administration would impact the scenario of procurement function as an industry:

Changes in Trade Policy

The Trump administration has considered reviewing all US free trade agreement with an agenda of declaring economic independence. With an increased focus on American made products and American hired services, dependency on China is bound to decrease. For the purchasing manager, it’s a logistical nightmare, as a major part of sourcing and procurement must be done within the US. It would affect the organization in terms of increased overhead and material cost, identification of new suppliers, consideration for GSA (General Services Administration) contracts, and process outsourcing.

Changes in Tax Policy

Reducing the corporate tax rate from 35% to 15% was one of the prime campaign promises of the Trump administration. Theget in touch reduction in the corporate tax rate would prompt CPO’s to reconsider the offshoring business processes to destinations like Mexico and China. Consolidating the business processes in their home country would result in shorter buying lead time, reduced transportation cost, and increased investment in the domestic market. Apart from the corporate tax, the Border Adjustment Tax (BAT) would levy a 20% tax on all imported goods; thus, raising the cost for procurement divisions.

Changes in Environmental Policy

One of the major changes in the environmental policy is how the Environment Protection Agency (EPA) combats pollution, pollutants, and harmful pesticides and toxins. The EPA would look into the matters of classification and use of toxins and pesticides used in everyday goods and consumables such as food, fruits, vegetables, detergent, cleaners, dye, etc. The procurement manager would have to reconsider options in terms of supplier selection, verify that the materials are not hazardous, and control the use of harmful chemicals like lead, mercury, and asbestos.

The Trump administration is expected to bring a lot of changes in terms of policy making, which is bound to impact the procurement department of organizations. It would affect not only the cost of sourcing and procurement, but also the lead time, supplier selection, and host of other considerations.

To gain more insights on the recent trends in procurement and supply market intelligence, get in touch

Related Articles:

Building A Strategic Partnership Between Procurement and Marketing

Making Your Procurement Strategies Mobile Friendly

Getting Down To Business

We are offering Free Trials to all our customers or prospects who have been impacted positively or negatively by Covid-19 and are looking to connect with prospect buyers immediately.

Contact us

COVID-19

Featured

Overview

Buyers

Diagnostic Test Kit

Additional Resources
Contact

A LOOK INTO THE FUTURE OF THE FOOD AND BEVERAGE INDUSTRY AFTER THE COVID-19 PANDEMIC

Identifying the Top 100 Coronavirus (COVID-19) Test Kit Manufacturers Across Regions

Sourcing and Procurement Market Intelligence Services

Products and Tools

Featured

Services Overview

Category Market Intelligence

Supply Market Analysis

Low-Cost/Best-Cost Country Sourcing

Benchmarking

Spend Analysis

Cost Modeling and Should-Cost Analysis

Total Cost of Ownership (TCO) Analysis

Supplier Risk Analysis

Supply Chain Risk Assessment

Supplier Sustainability Assessment

Commodity Price Forecasting

Category Management

Supplier Negotiations

Contract Management

Procurement Store

Purchase Ready-to-use Reports

SEinsightsTM

Our Robust Procurement Platform

BizVibeTM

Suppliers and Buyers Marketplace

SUPPLY MARKET ANALYSIS FOR A METAL MANUFACTURING COMPANY HELPS ACHIEVE ANNUAL SAVINGS OF $15 MILLION

Industries

Industries Overview

Automotive and Tire

Banking, Financial Services and Insurance

Biotechnology, Pharmaceutical and Life Sciences

Chemicals

Energy

Food and Beverage

Industrial and Manufacturing

ICT, Media and Entertainment

Mining, Metals and Minerals

Retail and CPG

Transportation

INCREASING LOCAL PROCUREMENT BY 28% FOR A COMPANY IN THE METALS AND MINING INDUSTRY – A CASE STUDY BY SPENDEDGE

Resources

Featured

Resources Overview

COVID-19 Resources

Blogs

Case Studies

Whitepapers

Webinars

Press Releases and Media Mentions

5 KEY CORONAVIRUS RISK ASSESSMENT STRATEGIES TO OVERCOME HEALTHCARE SUPPLY CHAIN CHALLENGES

IDENTIFYING STRATEGIC PURCHASING PRACTICES FOR A COMPANY IN THE US FOOD SERVICE INDUSTRY | SPENDEDGE’S LATEST SUCCESS STORY

Clients

Featured

Clients Overview

Who We Serve

Case Studies

SUPPLY CHAIN MANAGEMENT HELPS AN IMPORT AND EXPORT INDUSTRY CLIENT ENHANCE SUPPLY CHAIN VISIBILITY

REALIZING SAVINGS OF $15 MILLION IN PACKAGING SPEND FOR AN FMCG CLIENT – PACKAGING SOURCING STRATEGY

About Us

News

About SpendEdge
Why SpendEdge?
Vision, Mission and Values
Clients
Social Impact
Global Offices

Press Releases and Media Mentions

Upcoming Events & Webinars