Trump’s win signals major shift for global outsourcing industry

WASHINGTON D.C., UNITED STATES — Donald Trump’s victory in the 2024 U.S. presidential election is expected to bring sweeping changes to the global outsourcing industry. His “America First” agenda, which prioritizes reshoring American jobs and revitalizing domestic manufacturing, could lead to stricter policies against outsourcing. 

This shift is likely to impact industries that rely heavily on foreign labor markets, particularly in major outsourcing hubs like the Philippines and India.

Philippine BPO sector faces economic uncertainty

The Philippines, a global leader in business process outsourcing (BPO), is bracing for potential fallout from Trump’s policies. The country’s BPO sector contributes over $20 billion annually to the economy and employs more than 1.2 million people. However, Trump’s push to encourage U.S. companies to bring jobs back home could threaten this vital industry.

According to a previous report by Nomura, a Japanese investment bank, Trump’s policies could reduce the Philippines’ economic growth by 0.2 percentage points due to job losses in the BPO sector and lower remittances from overseas Filipino workers. 

While Philippine officials may seek new trade agreements with the U.S., the long-term outlook remains uncertain. Meanwhile, the IT and Business Process Association of the Philippines (IBPAP) remains optimistic, asserting that demand will stay strong regardless of the outcome of the U.S. presidential election. 

Indian IT sector prepares for challenges

India’s IT sector, which earns 80% of its export revenue from the U.S., is also expected to face significant challenges under Trump’s administration. Trump has consistently criticized outsourcing and has proposed new restrictions on U.S. companies that move jobs abroad. 

These measures could severely impact Indian IT firms that depend on American clients for business.

Additionally, Trump’s previous stance on H-1B visas — critical for Indian professionals working in the U.S. — suggests that stricter immigration policies could return, increasing costs for Indian companies and limiting opportunities for skilled workers.

However, Somdutta Singh, founder and CEO of e-commerce management company Assiduus, remains optimistic about the potential for U.S. investments in India. 

“Trump’s emphasis on countering China’s economic influence may shift investments toward India, opening up more opportunities for our start-ups. The strengthened military cooperation aligns with India’s strategic goals and could benefit defense-related start-ups, while his pro-business approach is expected to boost sectors such as energy and commodities,” Singh added.

On the H-1B issue, B.V.R. Mohan Reddy, former Chairman of Nasscom and Executive Chairman of Cyient Limited, noted that Indian companies have evolved beyond heavy dependence on these visas. 

“We don’t depend much now on H-1B visas. Indian companies have advanced in service delivery and are increasingly hiring local talent for specific roles,” he stated. 

Reddy also highlighted the rise of global capability centers (GCCs) in India, encouraging more U.S. companies to establish operations in the country.

Tariffs threaten outsourcing contracts

Trump’s aggressive stance on tariffs adds another layer of complexity for global outsourcing hubs. He has already threatened companies like John Deere with a 200% tariff if they continue outsourcing production to countries like Mexico. 

He also previously pledged to end outsourcing if reelected, aiming to transform the United States into a manufacturing superpower. His 2024 Republican Party platform, unveiled before the party convention last July, outlines this commitment as part of his third presidential campaign.

Senior campaign advisors Chris LaCivita and Susie Wiles noted that Trump’s platform includes 20 promises that concisely and accessiblely encapsulate the former president’s vision to “Make America Great Again.”

This signals that U.S. firms may face severe penalties if they move jobs offshore, potentially slowing outsourcing contracts across various industries.

Project 2025: Outsourcing government functions

However, while Trump’s campaign rhetoric focuses on reshoring corporate jobs, his administration’s Project 2025 blueprint also promotes outsourcing certain government functions to private contractors. The initiative suggests privatizing critical services like statistical analysis at the Energy Information Administration (EIA) and weather forecasting at NOAA. 

However, critics said this move raises several issues, including the possibility of a two-tier system in which wealthier areas receive better services while poorer communities face lower-quality forecasts, exacerbating inequalities.

Additionally, Project 2025 advocates outsourcing unemployment insurance administration to private firms, which could potentially result in job losses for government workers and reduced service quality for beneficiaries. 

These provisions reflect a broader trend in Trump’s policy approach — outsourcing government functions while discouraging corporate offshoring.

Outsourcing industry at a crossroads

Trump’s victory brings uncertainty to global outsourcing markets but also presents opportunities for countries willing to negotiate favorable trade deals with the U.S. 

As Trump doubles down on reshoring jobs and tightening immigration rules, major outsourcing hubs like the Philippines and India will need to adapt quickly or risk losing a significant portion of their economic lifeblood.