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July 26, 2018 7:00 PM, EDT
Editorial: Turning Wheels and Trade Deals

It’s quarterly earnings season, a time of year when the Transport Topics business reporting team is immersed in revenue figures and profit-and-loss numbers. These financial releases provide perspective on how the industry is doing. Based on the numbers for the second quarter, the industry is doing pretty well.

Revenue and income are trending up for most companies that have so far reported. And revenue per tractor also is on an upward trajectory. With tight capacity pushing rates higher, that’s little surprise. Things also are looking good for those who supply the industry with equipment. Truck- and component-makers reported strong demand for the quarter; again, considering the robustness of truck sales and ordering data that we’ve seen this year, little surprise.

Speaking at an industry conference last week, American Trucking Associations Chief Economist Bob Costello said he believes this winning streak will continue for a while; it’ll be a year or so before he’s ready to start talking about a possible recession.

What does cause him and others concern is the looming threat of a global trade war. Groups that include farmers, automakers and soft-drink manufacturers have voiced concern about the damage that tariffs on raw materials will inflict on their businesses. The big swings in production costs brought on by tariffs would hit them hard, and the pain would be passed down to the consumer.

President Donald Trump has been swinging a big stick when it comes to tariffs, all in the professed pursuit of securing better terms for the United States with its trading partners. His words have caused some angst. But as this issue of Transport Topics went to press, this tough stance appeared to be bearing fruit. On July 25, Trump and the European Union announced plans for a deal in which neither side would impose tariffs on non-auto-related industrial goods. The two sides even mentioned farmers in a joint statement about the agreement. The details must be ironed out, but it’s an important step — and, arguably a victory — in Trump’s mission to strike better deals for U.S. trade.

It’s little surprise that this businessman-turned-politician came to office with this goal in mind. But some might be surprised that he reached this EU deal just as fears of a trade war were heating up.

The last word on that potential trade war is yet to be written, but let’s hope the good times won’t come to a premature end, and that worries of a downturn can stay a concern for farther down the road.