As a business owner, your primary focus is on growing your business. This means expanding your market, looking for competitive advantages anywhere you can, finding cost-saving strategies with every new challenge and hiring the right people on your team to help you achieve these goals. Global markets rise and fall and depending on the industry you’re in, this can directly impact how easy or difficult growing your business will be. Across the globe, trade tensions between the US and China have been directly linked to the extreme volatility we’ve been experiencing in our markets. Even with scheduled meetings this month between the two economic juggernauts, the unknown still lingers like a dark cloud over business owners and remains a deterrent to making any large decisions or big changes for your business.
Murmurs of recession and significant market correction continue to find their ways into headlines and given the recent market pullbacks, it’s enough to make any business owner take pause. A partial trade deal could be in the works between Washington and China but, as always, there are caveats. As the possibility of movement in this trade war has dimmed over the last few days, China has said they expect Trump to scale back his planned tariffs if any trade agreements are to move forward. The US has been clear about its intention and most likely will not agree to any long term language unless China is willing to concede on key points, such as intellectual property theft (a problem that has been going on for decades) and state subsidies that put the US market at a significant disadvantage.
Tariffs are expected to be raised on October 15th to as high as 30% on some trade goods but with Trumps rapidly developing impeachment inquiry, there could be pressure on him to hold or slow down these scaled tariffs. Still, 28 more technology companies were added to the export blacklist on Monday evening, citing human rights abuse in certain Chinese regions.
Uncertainty, unpredictability, volatility, political strife and extremely tenuous trade agreements are the themes this week, this quarter and this year. There seems to be no end in sight, and as an American importer and exporter of goods, you need to be looking into strategies to hedge your risk against constant trade war talk and possible market pullbacks. One strategy that many successful business owners are taking advantage of is using Foreign Trade Zones as a means to bring goods into or out of the US and delaying or lowering custom taxes and tariffs. If your business is being affected by the trade tensions between any economic superpowers, or if your business might be affected by them, it’s time to look seriously at how you can get ahead of these constantly changing costs and maintain your competitive advantage in an unpredictable environment.
Published on October 9, 2019