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February 08, 2017 01:00 AM

EDITORIAL: OTR business hoping for Trump effect

Tire Business Staff
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    Off-the-road tire manufacturers and their tire dealer customers continually monitor the construction and mining industries to gather and analyze data to help determine how their businesses are likely to fair in the coming year(s).

    If mining and construction activities look to have banner years, for example, it's likely original equipment and replacement tire demand will be strong.

    Conversely, if mining and construction are looking to be weak, tire demand is likely to be down as well.

    This year, the OTR tire business has a wildcard to consider: the Donald Trump effect.

    During his presidential campaign, Mr. Trump proposed investing $550 billion in federal funds, likely over five years, in infrastructure and public works projects, according to forecasters Dodge Data & Analytics.

    As one tire industry executive put it: If the federal government hikes funding for highway projects that should also give a boost to the tire business.

    Now that he is in office, the question is: Will President Trump's campaign proposal become a reality and, if so, how much impact will it have on the mining and construction sectors and consequently on the tire business?

    The president is wasting no time in taking action to fulfill his campaign promises.

    Less than a week into his presidency, he signed executive orders to jump-start construction of the Keystone XL and Dakota Access pipelines, projects that had stalled under the Obama administration.

    In addition, the president has signed two executive orders to begin the controversial construction of a wall along the U.S-Mexico border.

    Mining, too, is hoping for a bump from the election of a new administration, although the mining industry is driven more by global supply and demand than by governmental action.

    So any action by the president would be more indirect.

    Still as one mining industry executive suggested, the new administration has the opportunity to be more favorable toward natural resources in general than perhaps past administrations, which could help in positioning the market.

    If early actions are an indication, President Trump seems serious in his efforts to create jobs and to spend heavily to improve the nation's infrastructure—provided he and Congress can come up with a workable plan to fund the initiatives.

    If so, that would be a boon for the construction industry and maybe even for mining, as well as indirectly for OTR tire manufacturers and tire dealers.

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    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

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