A chilling effect on demand
As Brandon Fried, executive director of the U.S Airforwarders Association, wrote in our June issue, the course of action the administration has taken with tariffs could result in some unintended consequences, such as a reduction in demand for air cargo. Although most of the goods affected by the tariffs are not typically shipped by air, the chilling effect of protectionism could affect all types of transportation modes.
“As the promising new business-friendly tax law takes effect in the U.S., the imposition of tariffs could dampen forecasted explosive growth, and the imposition of the duties may discourage an expected surge in freight volumes,” Fried said. “Inflation might also increase due to more expensive raw materials, which may cause American-built goods to become more expensive as a result.”