In addition to the current economic issues caused by COVID-19, there are other significant events in 2020, such as the U.S. presidential election and the United States-Mexico-Canada Agreement (USMCA) implementation, which could directly affect international trade.
To collect deeper insights into how businesses are being impacted by COVID-19 and capture their perspectives on international trade developments, DHL conducted a survey of U.S. SMEs, including its customers.
Key findings from the more than 2,000 responses include:
• COVID-19 causes pullback on international business outlook: Almost half (49%) of respondents said the coronavirus has resulted in them taking a more conservative approach to their business’ global trade strategy. Only 15% are taking a more aggressive approach, while 36% are staying the path on their international approach as a result of coronavirus. It is no surprise that the majority are being conservative since according to our survey, overwhelming 78% of respondents have had business revenues decrease either slightly or significantly due to COVID-19.
• International policies will the tip scales at the voting booths: An overwhelming majority (78%) of respondents said the U.S. presidential candidate’s view on international trade will affect the way they vote this election year.
• Business owners are willing to make sacrifices to make trade easier: 37% would forgo all their vacation for a year if it guaranteed no additional international trade barriers/regulations for their business.
• Asia remains a top business target: Despite COVID-19 originating in China, almost one-third (32%) of respondents said Asia is the top priority region for their business this year. In last year’s survey, 21% selected Asia as their top priority region. The YOY increase in confidence in Asia is likely due to progress in potential relief with China tariffs. Additionally, other countries in Asia, such as Vietnam and Japan, have emerged as top trade and manufacturing partners for U.S. businesses as a result of the U.S.-China trade war.
Rosemary Coates, President of Blue Silk Consulting and a columnist for Supply Chain Management Review, feels that relations between the U.S. and China remain fragile:
“The U.S. government is creating even more animosity toward China, blaming them for the pandemic and threatening more tariffs in retaliation for allowing the virus to spread to America,” she said. “This is creating an even bigger gap in cross-border trade and cooperation that will likely enflame the trade wars even further.”