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What We Know About Exporting Trends So Far
(This is a contributed post)
Lately, the export market has suffered many terrible blows. Firstly, it was the trade war between the US and China, then it was the pandemic for which we are still in and paying for and, then there was the recent Suez blockage. So many events that are detrimental to exporting have occurred one after the other. If you are a business that is seeking to export your goods and is wondering what kinds of challenges lie ahead, these following things should give you a clue.
Decoupling from a giant
Governments around the world are considering the challenges posed by working with China. Many wish to continue their standing relationship but the pandemic has shown that having supply chains that must sail 11,000 miles is no longer viable. So in a sense, a decoupling chain of events will probably begin to occur soon. The UK, Canada, Australia, and other nations such as the US, are considering doing less manufacturing trade and goods with the Chinese giant. Although this may not mean going cold turkey, it will drastically reduce trade with the far-east.
Domestic supply chains
The reason why the West has been so reliant on China is that it no longer funds or trains its own manufacturing industries as much anymore. To make the shift mentioned above, economies such as the UK, France, Germany, and the US, would need to do a few things in succession and with utter resolve.
- Make manufacturing cheaper to do domestically
- Make the regulations a little less stringent and lower taxes for manufacturing goods
- Train the next generation of skilled workers
- Invest in plants, factories, and facilities to make manufacturing more sustainable
- Invest in green technologies so running costs are lowered.
Greater customs checks
With the need to become greener as a global economy, there shall be more checks regarding cargo ships and freight trains. Trucks will also be subject to these checks. This is why a customs broker that anticipates the changes in legislation that will come down from the Green New Deal and the Build Back Better campaigns, is so valued. Working with them you will be able to design and make products that fit the new rules and regulations. This avoids you having to pay any fines or fees to export and import any goods.
Increased protection
As we are seeing in the US, protectionism is something to be mindful of. It will require companies who wish to export to consider the fees it may cost to do so. Consider the exchange rates, as the US and China are having a bit of a currency joust. Consider the political risks of tariffs and of course the domestic politics of tax rates and periods of legislative instability. Working with government officials and sharing your concerns with them, is greatly advisable in the current climate.
It’s still a great time to be an exporter, despite these challenges. As long as you are watching the global situation and the shift that is going on regarding supply chains, you should be able to weather this slight storm.
