The International Air Transport Association (IATA), the clearing house for over 330 airlines across the globe has joined many other multinational companies to express their uncertainties over what they perceived may be the imminent threats of the economic policies of the government of the incoming President of the United States Donald Trump may have on international businesses.
The fear of uncertainties being nursed is coming from the body language of the different tax policies and reforms already let out of the bags since the re-election of Donald Trump some weeks ago.
As Trump is expected to return to the White House seat of power in January 2025, international businesses and trade partners including the airlines, have developed cold feet towards what fate may likely befall businesses in the second coming of Trump.
Like other international bodies that have expressed uncertainties over the coming of Trump and his economic policies, IATA in its 2025 outlook has declared that the incoming Trump Administration in the US is bringing with it several significant uncertainties.
According to the IATA Director General, Willie Walsh, during the 2024 Global Media Day in Geneva in Switzerland “Tariffs and trade wars would likely dampen demand for air cargo and potentially also impact business travel. Should these policies rekindle inflation with higher interest rates as a policy response, negative impacts on demand would be exacerbated.
“However, should the business-friendly stance of the first Trump administration continue into this term, gains from deregulation and business simplification could be significant. There is uncertainty regarding government support for aviation’s decarbonization efforts in the US until the path that the new administration will take becomes clearer.”
Equally, according to IATA Sustainability and Economics, as 2025 is fast drawing closer, “many of the potential risks in our assessment are heavily impacted by the presidential election result in the United States, the policy instability that can be expected of the incoming Trump administration, and its reverberations across the global economy.
“Chief among those are the promised tariffs. The recently suggested numbers include 25% tariffs on all imports from Canada and Mexico, and an additional 10% on goods from China, on top of any existing tariffs. The direct effects of the tariffs would be to increase prices in the US of the imported goods, and push the rate of inflation higher, unless people stop buying the goods or can find substitutes that are not affected by the tariffs.
“The targeted countries are most likely to retaliate in some form. This would limit US exports and dampen trade internationally, with lower global growth as a likely outcome. An outright trade war would be capable of plunging the global economy into recession. It is also possible that industry interests in the US will be able to influence policy in such a way that tariffs will not rise materially after all. One example of such industry interests is the US oil refineries. These tend to import heavy Canadian crude oil, and do not use the light grade produced by the US shale oilfields. As there are numerous such own-goals associated with any tariff policy, we dare to think that the risk of implementation is high but still not certain.
Read Also: Orange peels, orange juice improve heart health — Research
The IATA DG however revealed positivity in the association’s outlook in 2025 with all regions of the world not only expected to show improved financial performance in 2025 as compared to 2024, but to deliver a collective net profit in both 2024 and 2025.
According to Willie Walsh, in the coming year; “Profitability, however, varies widely by carrier and by region. For example, the collective net profit margin of African airlines is expected to be the weakest at 0.9% while carriers in the Middle East are most likely to be the strongest at 8.2%.
