At least according to MarketWatch.com, U.S. airlines are skittish over possible effects on summer vacation travel based on tariffs imposed by the current U.S. presidential administration. Investors have shown increasing concern that the accelerated tariffs will generate more than just “trade friction.”
“The tariff plot thickens, the job loss threats increase…”
Well, surprise surprise Bubba, tariffs have consequences. Who could’ve guessed that slapping higher costs on everything might eventually hit airlines, travelers, and the folks who depend on summer travel to stay employed?
According to MarketWatch, airline stocks are heading south faster than a snowbird in December. The Dow Transportation Index is down almost 10% in a week, and while American Airlines somehow dodged the worst of it, Delta, United, and Southwest took it on the chin.
But hey, it’s probably fine. It’s just “trade friction,” right? That’s what they always say, right up until the layoffs start. Meanwhile, travel companies are seeing the writing on the wall: people are thinking twice about spending, and international tourists are taking their money elsewhere. I know of my in-laws in Poland opting for other venues. Imagine that people don’t want to vacation in a country picking trade fights like it’s a backyard barbecue.
The sad part? It’s not the decision makers who’ll feel it. It’s the ramp workers, flight attendants, regional airports, and tourism dependent towns already running on fumes.
But sure, let’s keep pretending this is all part of some 5D economic chess match. So far, it looks more like checkers, and we’re the pieces getting jumped.
I fear that if this trade war continues for very long, US airlines (and likely the whole US aviation industry) will face economic headwinds worse than during COVID.
More good news for aviation, eh? And Sunday evening futures for Monday trading are down 979 points. Turn me over, I’m done on this side.
As POTUS played golf, winning yet another tournament, he declared to his followers - unwittingly held in subserviance by space-laser tractor beams - that tariffs will ‘make us rich again’…
Meanwhile…Thousands of Lithuanian citizens lining the streets along with President Gitanas Nausėda, religious leaders and other dignitaries were among those who stood in respect as hearses carried the bodies of four young American servicemen to Vilnius airport before being flown to the United States for burial. A touching, very moving honor. Many of the onlookers were in tears, as was I.
I wish the airlines well, because as they go, so goes GA. But for now, I’m circling my own wagons just for survival.
Again, it’s not the tariffs driving the market decline. It’s only an excuse, it’s a convenient whipping boy. The reason the market is declining the way it is, is, it has been fed by free money by the fed over the last ten plus years. It was never sustainable. All you have to do is look at the run-up that has occured over the last decade. That sprinkled with a little common sense is all that is required. Reality is finally setting in.
Its the tariffs. And the lack of any coherent reason for them.
I can guarantee you would be singing a different tune if the markets were as they are now if the “other guy” implemented these tariffs instead.
And also the incorrect math they used, that even the AI responses say is incorrect.
You are dead wrong on all counts. It’s the tariffs, full stop.
“But sure, let’s keep pretending this is all part of some 5D economic chess match. So far, it looks more like checkers, and we’re the pieces getting jumped.”
Raf, your allegories are not only entertaining, but hit the nail right on the head.
Clearly, reality has not set in for you.
International visitors also are taking their money elsewhere out of fear that they will be detained in a jail and deported if TSA finds something on their phone or in their social media accounts that is critical of the President. Three people who were going to visit us this year from Germany, France and Vietnam are now not coming. Europe and Canada have issued travel advisories cautioning about travel to the US. It’s hard to believe this is what we’ve become in less than 3 months.
On the bright side…the ~10% drop from questionable tariffs is no where near the precipitous drop that were caused by the questionable COVID response.
You are 100% correct. Everyone ignores the fact the USA is incredibly in debt.
Pay now or pay later.
The doomsayers are predicting catastrophic job losses and economic ruin from Trump’s announcement, but today the EU offered zero tariffs on all industrial goods. This is the first step in a pattern that will play out across all countries and industries where people have any sense, so not Canada until after the election, and will be a boon to US exporters.
I prefer not to discuss politics on an aviation forum and I don’t have a dog in the fight since I voted for neither presidential candidate, but here goes: 1) The inversion of the yield curve (10 year treasuries vs. short term notes) has predicted a recession in the US 100% of the time (I believe this is a true statement), although the lag can be substantial. The yield curve has been inverted for some time. 2) Most economists believe that the overall stock market has been over valued for some time and a correction is healthy. 3) We might all prefer no barriers to trade, but international trade has been a mess for years with little help from the WTO. 4) I don’t see what’s fundamentally unfair about reciprocal tariffs in the short term. 5) China is a predatory country with slave labor who has abused American markets and foreign intellectual property.
All you people foaming at the mouth about the tariffs neglect to understand or acknowledge that the recently imposed tariffs are half or less than those imposed on us. Sure, give the world a free ride like always and blame the “orange man” for bringing things a bit closer to parity.
I guess none of you nay-sayers ever received a decent education.
Not sure why this is a reply to me since I was raising an issue that may be depressing airline international travel. Perhaps you meant to reply to Raf.
scarlson, I get that you’re trying to be balanced, but your comment ends up excusing a tariff program that, in execution, remains a complete mess.
I’m not an expert, just learning as I go, but as I understand it, there’s no question that China has used unfair trade practices, and the WTO has been too slow and weak to respond. Economists like Dani Rodrik, and trade folks at Brookings and the Peterson Institute for International Economics (PIIE), have said that reciprocal tariffs can make sense when they are strategic, limited, and aimed at getting fairer terms, especially when dealing with countries that exploit global rules.
But that’s not what happened here.
What we got under the tariff plan wasn’t a smart recalibration. It was more like an aimless shotgun blast. Tariffs were slapped on both allies and rivals, justified under shaky national security claims, and rolled out without a clear plan or much domestic or global support behind it.
The fallout has been real:
Trade may have needed fixing. But this rollout was botched and amateurish. It is hurting working people, retirees, and delivering almost nothing in return. Dressing it up with theory doesn’t change what actually happened.