The F-150 in particular, and the transportation industry as a whole, vivify why tariffs are problematic. After all, transportation is a capital-intensive business, with long timelines to bring products and services to market. This not only darkens the investment case for transportation-related enterprises, but it also opens the door to more non-tariff barriers, such as licensing requirements and enhanced inspections of both cargo and passengers. The result will be a more difficult operating environment for all manner of transportation firms and economy that will slow down along with the speed of the trains, trucks, buses, airplanes, and pipelines that keep it in motion.
President Trump makes cogent arguments in favor of the tariffs, ranging from solving social problems, such as the flow of fentanyl, to giving domestic businesses a chance to grow. However he has also offered a less disruptive solution to these problems, dating to his first term, that envisions: “zero tariffs, zero subsidies, and zero trade barriers among all nations with which the U.S. engages in commerce.” Such a policy would be a significant booster to President Trump’s efforts to foster a new Golden Age of America and the transportation sector could lead the way.
The zero-tariff policy would open an EU-style common market and travel zone that would not only include our fellow North American countries, but also overseas nations such as England and Japan. The benefits would be immediate and significant. For example, consider the reduction in border crossing times that would enable railroads and truckers the ability to schedule crew members for cross border trips that involve fewer delays, thanks to less time waiting in line to cross borders, the ability to use a driver’s license (which indicates citizenship in a zero-tariff country) as the lone travel document, and harmonization of licensing requirements. The benefits would reverberate across networks operated by railroads and truckers thanks to the flexibility that transportation providers would gain in hiring and scheduling operating crews.
Likewise, faster border crossings mean increased utilization of expensive assets like airplanes, locomotives, and truck trailers. Higher utilization equals an enhanced ability to earn returns, improving the ability of these companies to raise capital, hire, and innovate.
Of course, President Trump’s zero-tariff proposal would also benefit users of transportation. Shorter transit times would give transportation operators greater flexibility to offer businesses of all sizes the type of customized transport solutions that lead to greater profitability. Further, the ability to seek transportation providers within a large, multi-country, trans-oceanic marketplace means that competition based on the lowest cost could be superseded by competition based on the ability to meet specific needs. This result would revolutionize American businesses by ending the commoditization of transportation and expanding the number of personalized and resilient supply chains.
Businesses, however, would not be the only beneficiaries. Consumers would benefit from seamless travel throughout a zero-tariff common market. Starting at the airport, within this marketplace the elimination of a second round of security checks for international fliers would make it possible to schedule tighter connections. The same goes for customs inspections at destinations, which would narrow their scope to those individuals who hail from outside the zero-tariff zone. Thus, the romantic idea of a besotted couple flying from London to New York and enjoying a beautiful sunset on a Manhattan balcony can be accomplished without the time-consuming hassles normally associated with entering the country.
Many benefits would also redound to those whose countries are not part of the zero-tariff zone, including faster processing at points-of-entry thanks to the more efficient usage of customs inspectors. This too, would streamline the movement of cargo and people, whetting the appetite for closer diplomatic relations leading to an expansion of this zone.
While today, the Ford F-150 may be the poster child for the negative aspect of tariffs, its case can help American policymakers lead the world back to growth simply by implementing President Trump’s 2017 proposal of zero tariffs, zero subsides, and zero trade barriers. While this is an audacious step, it will also play a key role in catalyzing America’s next Golden Age, fulfilling the goals articulated by President Trump and those who have enthusiastically stood with him throughout his political career.
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