With a president in the White House who is not afraid to fight for U.S. economic interests, the fireworks are starting.  President Trump recently announced a laptop ban for passengers flying on specific airlines coming from certain countries.  Initial headlines from the mainstream media missed the point of the ban entirely.

From The Guardian:

Will the air travel laptop ban stop terrorists?

From Vox:

The US is imposing a “laptop ban” on flights from 10 airports in majority-Muslim countries

This ban is not about safety or bigotry – it is purely about business.

While the pretense for the new restriction is in the name of national security, applying even the tiniest bit of logic causes that rationale to crumble.  While it may be true that intelligence received from the January raid in Yemen led to this ban, let’s be realistic. If a terrorist is sophisticated enough to figure out how to put a bomb inside a laptop, past security, and onto a plane, they are certainly bright enough to figure out a way to rig a simple timer to detonate their device in the cargo hold.  That’s right; the rule only bans laptops from carry-on luggage.  Passengers are free to have them all the way to the gate, after which they will be stowed under the plane for the duration of the flight.

If not safety, then surely the ban stems from xenophobia, right?  What better follow-up to a travel ban than a laptop ban?  Here you would be wrong again.  The real rationale behind the new rule, which only applies to certain foreign airlines, is all about economics.  Flag carriers, or airlines that feature the flag of a nation and serve as the most prominent carrier of that country, are usually privately owned in the Western world.  Names like Qantas, Air Canada, Lufthansa, and British Airways have zero government ownership.  The same goes for every U.S.-based carrier.

Airlines in developing countries and the Middle East, however,  tend to be owned entirely by the government.  EgyptAir, Qatar Airways, Royal Jordanian, and Emirates are all one hundred percent state-owned operations.  Because of this, they can undercut American airlines significantly, since the foreign governments heavily subsidize their flights and they can sell tickets at a loss.  For example, travelers from the Washington, D.C. area have two non-stop options to Doha, Qatar.  Guess which one is cheaper.

Since we are not going to nationalize an airline here in the United States, this struggle for market share has been the story for years when it comes to travel to these rich countries.  President Trump decided to do what he does best: fight for American interests.  By implementing the laptop ban, the president is hitting these foreign airlines where it hurts most: their high-margin business- and first-class travelers.  For a business traveler, a 12-hour flight is a workday and a half.  Without their laptop, their productivity will suffer. From a business standpoint, it is worth spending the extra money to fly on an airline where they can bring their laptop to their seat.  Since those carriers happen to be the American ones, U.S. companies will now win that lucrative business.

You have to hand it to the president on this one.  This ban is a slick way to stick it to these foreign airlines and give our companies, many of whom exist as stocks inside your retirement portfolios or employers to your neighbors, a much-needed boost.  If the president can throw one or two of these business-focused jabs every month, the results are going to start adding up.

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Dan Ingram

Business Correspondent at LibertyNation.com

Dan is a freelance writer specializing in finance, economics, and tax policy. He is a U.S. Army veteran and holds an MBA in Information Technology Management.He resides in New England with his wife and young son.

 

 

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