The single most important change I expect for the industry in 2013 is confidence. Since the election, the business community (including the trade industry) is looking for signals from President Obama and Congress that they are serious about avoiding the fiscal cliff and then strike a deal on tax reform, entitlement reform, and the national debt.
Such progress will translate into confidence in three key areas: investment, regulation and hiring. Confidence about all three has been missing for four years.
A political deal to avoid the fiscal cliff will provide confidence to the business community by providing certainty on taxes so companies know what the tax rates on income, dividends, and withholdings will be for the next few years. This is critical for large capital investment in transportation, such as rolling stock and IT systems.
Another aspect of confidence with President Obama’s the re-election is the commitment to complete the export control reform effort started in his first term. By completing the regulatory changes necessary to recalibrate the controls appropriate for dual-use technologies, we hope the administration creates an environment where companies (particularly small and medium size business) feel export reform is for real and they can target foreign markets to sell their products with confidence by obtaining the necessary licenses in a timely manner. Trade promotion authority for the president to complete the Trans Pacific Partnership would be lagniappe.
A political climate that provides stability for investment and a tax framework for companies to figure out whether they can hire new employees will be the ultimate measure of confidence in the U.S. economy and then we will see global trade volumes increase.