Trump’s Europe Travel Ban Will Hurt Air Cargo, Despite His Reassurances – Forbes

President Trump spoke from the Oval Office about the coronavirus, a European travel ban and, … [+] confusingly, about the impact on trade.

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President Trump’s Europe-U.S. travel ban will have a signficant impact on trade, his protestations to the contrary notwithstanding. That’s regardless of whether the restrictions end up being closer to what Trump said as he read from a Teleprompter in the White House in talking about the coronavirus pandemic or what he tweeted shortly thereafter in “walking back” those initial comments[1]. It matters because the United States depends on Europe for such a large percentage of global imports of vaccines, plasma and other blood fractions like white blood cells; medicines for high-blood pressure and heart conditions; and the chemical compounds used to make medicines.

Total air cargo trade between the United State and Europe accounted for almost £493 billion in 2019, better than 40% of all U.S. air trade with the world and almost half of U.S. trade with Europe overall. Presuming those restrictions go into effect today as scheduled, any lack of clarity will be unsettling not only to the beleaguered airline industry but to the patients who depend on the above products and many more. While on camera, Trump had said that “. . . these prohibitions will not only apply to the tremendous amount of trade and cargo but various other things as we get approval.

Anything coming from Europe to the United States is what we are discussing.” Shortly thereafter, Trump tweeted[2] to “please remember, very important for all countries & businesses to know that trade will in no way be affected by the 30-day restriction on travel from Europe. The restriction stops people not goods.”

But that’s not true. If passenger travel is being restricted, it will lead to a decrease in flights and capacity, leading to bottlenecks in the supply chain. About 75% of the air tonnage capacity in cross-Atlantic trade is on passenger jets, almost exclusively wide bodies, in what is commonly called “belly cargo” since it flies below the passengers with the luggage.

The remainder is carried by “freighters,” planes with only a crew. In terms of the actual tonnage carried, the total on passenger flights is actually closer to 43%. Some of that difference can be pinned to the fact that passenger airlines have a tremendous number of flights that leave at regularly scheduled times, whether their belly is full or not, while there are fewer freighters and they leave on a less predictable schedule, generally needing to meet a threshold to operate profitably.

Passenger airlines, of course, also rely on their cargo to operate profitably. Though it only adds a few percentage points to the bottom line, in an industry with thin margins, a few points often make a significant difference. And 43% is far from an insignificant total.

Germany and France are among the nation’s top 10 trade partners. The Netherlands, Italy and Ireland are in the top 15. Switzerland and Belgium are in the top 20. (The United Kingdom is also in the top 10 but President Trump excluded it from the ban.)

Looking closer at those commodities mentioned earlier, Europe accounts for 82.14% of global air imports in the main medicine category, which would include medications for blood pressure and heart-related conditions. Europe accounts for 82.88% of the vaccines, plasma and other blood fractions. It accounts for better than 93% of U.S. imports of certain chemical compounds flown into the United States from around the world.

These are the first-, third- and fifth-leading imports flown into the United States from Europe.

References

  1. ^ https://www.usatoday.com/story/news/politics/2020/03/11/trump-clarifies-europe-travel-remark-says-ban-doesnt-apply-cargo/5028734002/ (www.usatoday.com)
  2. ^ https://www.ft.com/content/e5efafc0-6419-11ea-b3f3-fe4680ea68b5 (www.ft.com)

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