US Companies Continue to Float towards an Expanding Global Market despite the Risks of Trade Policies

Global Market

In recent past, the global business landscape has undergone immense remodeling. As a result, businesses are slowly reaching stability and are encouraged to explore into overseas territories that present lucrative growth opportunities. Moreover, with the recent cooling of the Chinese demand, 2017 is likely to be the year that will not see any major economic slowdown. Despite such positivity in the global business environment, investors remain wary about enticing trade- opportunities present in various regional market as new risks have emerged from the international supply chains.

Growing optimism among executives to an extent has been mitigated by political uncertainties in some of the power house nations such the the UK and the USA. The newly developed group of Euroskeptic thinkers and the Brexit referendum have raised concerns over the long-term integrity of the European Union. Besides, the current global trade regulations have become stale and outdated, hence drawing of new comprehensive trading laws is quite necessary. Meanwhile in the US, the new administration announced that the nations will no longer be a part of the Trans-Pacific Partnership agreement and is rethinking on trade treaties like NAFTA; with president Trump recently dropping the idea to axe the agreement and willing to reach some kind of negotiation. In addition, the US administration is also taking a hard look on import tax duties on an array of goods that made in counties such as Japan, China, Germany, Canada, and Mexico. This can potentially ignite trade conflicts with the country’s key trading partners.

Many of the US-based companies heavily depend on international trade and are daunted of the potential influences associated with alterations in US trade laws. In the modern world, the supply chains are interconnection across regions, any major alteration in trade policies may result in unintended consequences. For instance, increased levy on goods made in China is likely to affect several other nations that fall under the value chain. Though the final assembly may take place in china, the raw materials and component might not necessarily be manufactured in the country. Since the US exports largely account for services, intellectual property and manufactured goods, the effect of a sudden hike in import levy would be felt severely by the countries businesses.

American companies continue to foray into emerging overseas markets, especially in Asia as it holds a vast consumer class. These companies are extending their footings in Asia and are trying to further strengthen distribution networks and supply chain.

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