How a Trade War could affect your global business
Recent talk about trade in the news suggests the US and China could be entering a full-scale trade war. Just this week the White House administration announced plans to subject tariffs up to 25% on over $50 billion Chinese products. If the US and China cannot come to a trade agreement to reduce the current $375 billion trade deficit, how will a potential trade war affect your global business?
Large global companies can more easily absorb tariffs and withstand trade disputes than smaller startups and medium-sized businesses. The margins in certain industries like manufacturing and agriculture can be tighter and cause more pressure on certain market segments. For companies that heavily export to China, a potential trade war could be devastating to the bottom line.
Companies are now looking to shift to new markets like Malaysia, Africa, and others to offset potential losses from China. As trade talks continue between the US and China over the next several months, companies that export or import goods from China should start preparing a plan in the event of a full-scale trade war. The US Export Assistance Center (https://2016.export.gov/eac) offers help with alternative export options for companies that currently export to China.
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