SMEs Expanding Global Sales to Offset China Tariffs

SMEs Expanding Global Sales to Offset China Tariffs

In a DHL Express study, a majority of respondents (56%) said the recent changes in tariff policies have had a moderate or significant impact on their business operating costs.

Rather than sit around and see what happens, SMEs are being proactive and expanding their international audience to offset China’s tariffs, according to a new survey by DHL Express.

In fact, the survey revealed that trade barriers and constant changes to trade regulations are more than just a headache for business owners—they can have a major impact on sales and operations. That’s why all respondents were willing to go to great lengths to ensure they don’t have to worry about those issues:

 • 45% would rather have their in-laws move in than have to worry about international trade barriers/regulations for their business.

• 31% would rather give up their smartphone for a month

 • 19% would rather get audited by the IRS

 • 15% would rather get 100 scathing business reviews

However, on a more serious note, a majority of respondents (56%) said the recent changes in tariff policies have had a moderate or significant impact on their business operating costs. And when asked what business are most concerned about this year in regard to international trade, almost half (47%) of respondents said tariffs. Just 13% said they were most concerned about Brexit and 7% said the USMCA.

Highlights from the survey include:

Diversification is imperative. Businesses are recognizing that in order to offset declines as a result of tariffs, they should be expanding their international audience and entering more global markets. That’s why 40% of respondents said in order to drive more sales this year, they are focusing on additional international markets.

Canada and Mexico are looking more and more attractive. Which markets are most appealing? An overwhelming majority (55%) said both Canada and Mexico are a top priority for their business this year. This is likely because of their proximity to the U.S. and existing deep trade relationship with the U.S., but also because of the United States-Mexico- Canada Agreement (USMCA), which will provide important benefits to U.S. exporters and importers upon its final ratification.

Also garnering top interest according to survey respondents was Asia. Despite the tariffs placed on U.S. exports to China, 21% of respondents said they are making Asia a top priority for business this year—however many companies are likely looking at other growing Asian countries like Vietnam and India.

E-commerce is King. Almost one-third (30%) of respondents experienced 34-100% YOY (from 2017 to 2018) growth in international e-commerce sales, and that growth is only expected to continue throughout 2019.

Focus on fast shipping. Over one-third (34%) of respondents are focusing most this year on faster shipping options to drive sales.

Anything but trade barriers! International trade barriers and constant changes to trade regulations are more than just a headache for business owners—they can have a major impact on sales and operations. That’s why all respondents were willing to go to great lengths to ensure they don’t have to worry about those issues:

 • 45% would rather have their in-laws move in than have to worry about international trade barriers/regulations for their business.

• 31% would rather give up their smartphone for a month

 • 19% would rather get audited by the IRS

 • 15% would rather get 100 scathing business reviews

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