Like your business, the financial and regulatory environment you’re operating in is always changing. As you win or lose customers, hire new talent or manage employee departures, the marketplace around you is experiencing similar fluctuations. This is especially true if yours is one of the thousands of U.S. companies pursuing and benefiting from the power of global trade. In this case, your company must consider not just domestic economic conditions, regulatory modifications, and consumer attitudes, but those in your international target markets as well.
There is little doubt that events of the last two years – namely the escalation of trade tension between the U.S. and China – have amplified the normal challenges and considerations affecting international business operations. To ensure that your company can respond to global conditions, it’s critical to understand the key trends impacting trade today. To help, DHL recently conducted a survey of U.S. small and medium-sized organizations, including our customers, to gain insight into the most important business issues and the most promising new global opportunities they are facing. Here is a look at our findings:
Tariffs are front and center
When asked what businesses are most concerned about this year relative to global trade, almost half (47 percent) of respondents said tariffs. Only 13 percent said they were most concerned about Brexit, and 7 percent indicated the U-S.-Mexico-Canada Agreement (USMCA). Additionally, 56 percent of respondents said the recent changes in tariff policies have had a moderate or significant impact on their business operating costs. These statistics reinforce the arguments of the Tariffs Hurt the Heartland campaign, which is pushing to end trade tensions and increased tariffs.
Diversification is the answer
According to one report, retaliatory tariffs imposed by China have led to more than $40 billion in lost U.S. exports. To offset losses, business owners and managers are recognizing the need to enter new global markets. In fact, 40 percent of respondents in the DHL survey said that in order to drive more sales this year, they are focusing on additional international markets, and a clear majority (55 percent) said both Canada and Mexico are a top priority. While these two countries share borders with the U.S., they are also attractive markets because of their existing deep trade relationships, and because of the USMCA, which is expected to be ratified soon.
As we have noted in the pages of DHL Expressed, many companies are also turning to other Asian economies beyond China, like Vietnam. This trend is supported by the survey, in which 21 percent of respondents said they are making Asia a top priority for business this year.
E-commerce is everywhere
Almost one-third (30 percent) of respondents experienced 34-100 percent YOY (2017 to 2018) growth in international e-commerce sales, and that growth is only expected to continue throughout 2019. To boost your global online sales footprint, it’s essential to get your online customer service and your global website in perfect working order.
Fast shipping matters
This year, 34 percent of respondents are focusing on faster shipping options to drive sales. International shipping experts, like DHL, are using advances in logistics and new last mile delivery strategies to make speed and efficiency a reality for more companies every day.
Anything but trade barriers!
How much do business owners and managers dislike barriers to global trade, like complex and changing trade regulations? Considering this, 35 percent of respondents would rather have their in-laws move in with them than have to worry about international trade barriers/regulations for their business. 31 percent would rather give up their smartphone for a month; 19 percent would rather get audited by the IRS; and 15 percent would rather get 100 scathing business reviews. Fortunately, there are resources to help you navigate the complexities of trade, including these tips on avoiding delays in the border clearance process.
What are your top international business concerns? Let us know on Twitter @DHLUS.