By: Dan Cser
ICAT Logistics, Inc.
The challenge to find a productive path through a thicket of change factors — some good, some bad and some yet to be understood.
As the new year began, shippers and freight forwarders sought clarity in the mixed messages from an improving American economy, unsteady international trade pacts, deep divides in American and European politics, technology advances and challenges, and conflicting forecasts for world trade volume.
The cross-currents affecting trade and commerce are apparent in any “watch list” for the year ahead. Among those include:
At year end, politicians and economists debated how revisions to tax policy would give a growing economy an enduring boost. Business leaders were encouraged by expanding gross domestic product, a decline in the number of jobless claims and increased consumer confidence and spending.
“Consumers are realizing that the economy is strengthening and that pro-business policies are ushering in an era of sustainable growth,” Voya Investment Management market strategists Douglas Cote and Karyn Cavanaugh wrote.
At the same time, the head of the Federal Reserve raised concerns about tax cuts adding to a rising federal deficit. Federal Reserve Chairwoman Janet Yellen cautioned that America’s debt burden “should keep people awake.”
One television network headline captured the conflicting opinions this way: “A Trump bump or a Trump bubble?”
Uneasy Trade Alliances
There is more than the usual instability in the trade partnerships that help guide global trade and shipping.
Five rounds of NAFTA (North American Free Trade Agreement) talks ending in mid-November resolved few key issues for the U.S., Canada and Mexico. The most significant unsettled big-ticket item appeared to be autos, where the U.S. seeks a new provision that half of a car be manufactured solely in the United States.