Editor’s Note: In one of the most consequential elections of our lifetimes, and in a middle of the global pandemic, the 2020 Presidential Election could alter the course of the U.S. for generations. FreightWaves has produced this special series of articles covering the impact this election will have on the trucking industry.
Ahead of the 2016 presidential election, both Republican Donald Trump and Democrat Hillary Clinton made a lot of promises, many of them that would impact the freight markets and the nation’s 8 million-strong trucking industry that supports them.
During the campaign, Trump talked of improving trade deals, building world-class infrastructure, streamlining and removing burdensome regulations, and of course, reducing taxes. As Americans get set to vote on Nov. 3 in what is ultimately a referendum on whether they believe Trump has delivered for them, let’s take a look at some of the 2016 campaign promises that would have had the most impact on the trucking industry and see where things stand in 2020.
As the 2016 election rolled around, infrastructure seemed like low-hanging fruit. Both Republicans and Democrats had an infrastructure wish list, and Trump himself would later propose a $1.5 trillion infrastructure plan in his 2018 State of the Union address following constant talk on the campaign trail of investing in the nation’s future. In his victory speech in November 2016, Trump said the nation’s infrastructure would be “second to none.”
Proposals came around again in 2019, and Trump and the Democrats even struck a tentative agreement on a $2 trillion plan.
“The trucking industry sees this as a nonpartisan issue, and sees the current government — this president, this Congress — as a unique opportunity to do something,” Bill Sullivan, executive vice president for advocacy with the American Trucking Associations (ATA), said in April 2019 ahead of an infrastructure summit at the White House. “We understand there are going to be politics surrounding that debate and that negotiation, but we believe this is a moment where we can actually move ahead.”
After the summit, ATA President and CEO Chris Spear weighed in.
“In order for the House [of Representatives] to move first and get a bill done, [Trump’s] going to need to weigh in beyond saying, ‘I want infrastructure, I campaigned on it.’ He’s going to have to say, ‘I want this bill,’ or ‘I support this funding stream.’ It’s also really important for the president to weigh in for the Senate to take up that House bill and get it done by the end of the year. So, it really will take all three, in that order, for this to become a reality.”
Alas, an agreement was never finalized as the parties remained split on how to pay for a trillion-dollar-plus infrastructure deal. As COVID-19 sent the U.S. economy to new lows earlier this year, talk was revived of an infrastructure deal as a job-creation mechanism, but that talk has not led to any action to this point.
Eliminating or streamlining regulations was a significant part of the 2016 Trump campaign platform. He has largely done just that. From a transportation standpoint, the administration repealed the greenhouse gas emissions mandate for automobiles. Trucking has seen changes to the hours-of-service regulations, executive orders designed to speed infrastructure projects, rescinding of the Clean Fuels grant program, and adjustments to the entry-level commercial motor vehicle training rule to account for previous experience.
The Federal Motor Carrier Safety Administration is also looking at a broker transparency rule and is studying a proposal that would allow ex-military truck drivers under the age of 21 to obtain a CDL to drive interstate among other changes. It also altered hours-of-service regulations to offer more flexibility to drivers.
Largely, the administration has followed through on efforts to streamline and eliminate regulations it deems onerous and has been more responsive to industry, some have said.
“The new hours-of-service changes show that FMCSA is listening to industry and fulfilling its duty to establish data-driven regulations that truly work,” Truckload Carriers Association President John Lyboldt said at the time.
Trump promised to renegotiate what he called terrible trade deals, notably those with China and the North American Free Trade Agreement. He did that and has secured new trade deals in both cases. He also netted a trade deal with South Korea.
But a number of global tariffs remain in place, and there is some evidence that the Phase One trade deal with China is not bringing about an end to trade tensions between the two countries. In May, Trump blasted China, claiming the nation “ripped off the United States like no one has ever done before.”
COVID-19 has disrupted global trade, and as a result, it’s difficult to assess how the signed deals are performing, as well as Trump’s overall record on trade. According to Commerce Department data, the U.S. trade deficit climbed 5.9% to $67.1 billion in August — the highest level since August 2006. From January to August of this year, the trade gap has risen 5.7% over the same period in 2019. But the trade deficit with China fell to $26.4 billion in August, down 6.7%, and China appears to have increased purchases of American farm products.
U.S. Trade Representative Robert Lighthizer said the deficit increased in August because “America’s economy has recovered more quickly than our trade partners.” Others are not so sure.
Geoffrey Gatz, a fellow of global commerce and development for the Brookings Institution, said trade policy is difficult to judge, but noted that studies have shown that for every job created in the U.S. due to washing machine tariffs imposed, American consumers paid $817,000 more in higher prices as a result.
“In general, then, Trump’s tariffs have helped some workers and hurt others,” he wrote. “Nothing is particularly surprising about this; trade policy almost always has important distributive effects, and any change in trade policy is a choice to benefit some groups at the expense of others. Yet, overall, when economists have attempted to add up the net effect of Trump’s tariffs on jobs, any gains in importing-competing sectors appear to have been more than offset by losses in industries that use imported inputs and face retaliation on their foreign exports.”
Bring back manufacturing jobs
COVID-19 has muddied Trump’s promise on bringing manufacturing jobs back to the U.S., but before the pandemic hit, there wasn’t much clarity on how successful Trump had been with this promise. Auto manufacturing was strong before the pandemic, as were other sectors, and Trump has claimed recently that he brought back 700,000 manufacturing jobs.
Politifact has ruled the claim is false, but manufacturing did see a bump under Trump. According to the fact-checking site, the U.S. added 450,000 manufacturing jobs prior to the pandemic. It has lost more than 230,000 since. Politifact said that manufacturing employment dropped by 192,000 during President Barack Obama’s term, but the site added that the sector actually added 916,000 jobs from the depths of the Great Recession, which the country was still in the midst of when Obama took office. Obama also saw those gains over a seven-year period compared to roughly three years for Trump.
One of Trump’s biggest promises in 2016 was to cut taxes for Americans and American businesses. Largely, he succeeded in this, ushering in one of the largest tax cuts in history. The administration and Republican majorities in the House and Senate at the time cut the corporate tax rate from 35% to 21%, and reduced taxes for the majority of Americans, although those are set to expire by 2025.
The $1.5 trillion tax cut led to 51% of trucking companies reinvesting in their employees, ATA’s Spear said in 2018.
“We were very instrumental as an industry in [taking up and pushing] for tax reform,” Spear noted. “Keep in mind that this was the first major tax reform in 30 years … and we needed it to create a framework for long-term growth.”
Spear said the tax reform package resulted in “$3.6 billion, conservatively, given back to our industry.”
Health care was also one of the key tenets of Trump’s election push ahead of 2016. Trump and Republicans sought to repeal and replace the Affordable Care Act (ACA), aka Obamacare. The health care law has been a target for Republicans since its enactment. The GOP, though, has been unable to repeal the law through legislation, and as a result it has taken the battle to the courts. The Republican Congress was able to eliminate the tax penalty — reducing it to $0 in the tax bill — for not having health insurance, and that is the basis for a Supreme Court case set to be heard the week following the election.
Republican attorneys general in Texas and other states sued the government, claiming that without the tax penalty, the entire health care law is now unconstitutional. If the Supreme Court agrees (the last time the Supreme Court heard a case on the law, it ruled 5-4 it was constitutional), then the entire law could be invalidated. It is estimated that 20 million Americans receive their health care insurance through either the federal marketplace or state-run marketplaces under the ACA. According to the Center on Budget and Policy Priorities, 1.6 million front-line and essential service workers, including transportation workers, are enrolled in Medicaid for their health coverage. The ACA allowed many states to expand income limits Medicaid eligibility. In addition, for some small businesses, including owner-operators, the ACA and its requirement that insurers could not deny coverage based on pre-existing conditions, provided an avenue to obtain health insurance.
To date, Republicans have been unable to pass a replacement plan, so it’s unclear what may happen to the health care market should the Supreme Court uphold the lower court’s ruling.
Many experts believe voters ultimately cast their ballots based on one feeling — am I better off today than I was yesterday? For the trucking industry, which is made up of large and small businesses, and everyday Americans who are responsible for moving the nation’s freight, whether or not they are better off today than they were when Trump first took office on Jan. 20, 2017, is a largely personal question.
In the same vein, these key promises from Trump have produced mixed results. Some, like tax cuts, he has fulfilled. Others, like infrastructure, have largely gone nowhere.
When those in the trucking industry walk into the voting booth on Nov. 3 (or fill out absentee or mail-in ballots), they will render a verdict on which promises are more important to them, and whether Trump has met their expectations and deserves four more years.
Inside the Election 2020 series
Oct. 30: Is Canada ready for an U.S. administration change?
Oct. 30: In 2016, Trump promised trucking things would change. Have they?