The trucking policy panel at the National Trailer Dealers Association (NTDA) Convention Wednesday in Tucson, Ariz., was challenged to come up with some good news.
Ken Vieth, president and senior analyst at ACT Research, who also presented his trailer market forecast Wednesday, and Timothy Lynch, senior director at Morgan, Lewis and Bockius, had their work cut out for them.
"Tariffs are a drag on an otherwise good economy," Vieth offered. "There's a lot to like. Tariffs brake-checked an otherwise good economy."
[RELATED: OEMs, suppliers, manufacturers and dealers weigh in on truck tariffs]
Lynch says his cynical answer for what's going on in Washington, D.C., is "not much good," but these days, with the federal government shut down, "not anything" is his new answer. Depending on your point of view, Lynch says, the shutdown could be considered a positive.
Otherwise, the panel says attendees would do well to listen to keynote speaker Peter Sheahan. He told a story about an executive that didn't see disruption coming.
"Seriously, you didn't see this coming?" Lynch asked. "The guy who wants to shrink the size of government. There's no better way to do it than shut the government down."
The same goes for tariffs. Trump campaigned on the issue and here they are. And they could represent a positive for the trailer industry. A new 25% tariff announced on imported heavy-duty and medium-duty trucks may free up expenditure spend for updating trailer fleets, Vieth says.
"We work on the theory that, like the rest of us in this room, truckers hate to pay taxes," Vieth says. "They're the second sons of farmers, so they hate to pay taxes more than the average bear."
What they do like to do is invest in their businesses. So if power units are prohibitively expensive, they may turn to updating and upgrading their trailers instead.
Another issue causing uncertainty in the industry is the state of government regulations. Lynch says regulatory reform is positive and a major issue for the economy. States such as California are starting to step into the gap left by the lack of federal action on regulations, in both environmental and labor departments. He warns what we may end up with is a patchwork of things "that may not be positive."
[RELATED: As orderboards open, uncertainty weighs on demand, ACT says]
Some of these issues are also still up in the air. The Trump administration has not yet made clear its intentions toward pending NOx regulation. One theory is that the White House will simply decline to enforce the rule, but that has its own risks. A new administration could reverse that stance and levy heavy fines retroactively.
Lynch says everyone is on a roller coaster and it's fun on the way up, but then everyone has to come down. "We hope it ends up someplace reasonable," he says.
In more good news, the floor plan inventory tax deduction is another important issue in Washington and there may be some traction this year, Lynch says.
"We're the only entity — in the trailer world — that's still under the 30% cap," he says. But there's hope. Legislation has been drafted and there's a sponsor in the U.S. House and soon to be one in the Senate. Looking around the room, Lynch says the attendees can make a difference.
"I have to believe that you folks are in virtually every congressional district and certainly in every state," he says. "I think we have a chance to win this one."
