Drastically Rethink Your Global Business Strategy If ...

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Now (10/29/24), as former President Donald Trump campaigns on a pledge to hit all goods coming into the country with a 10%-20% tariff, or border tax, which would rise to 60% for goods from China, companies that import from China are having to drastically rethink their strategy.

America, once a global champion of free trade, is about to be taken off its game should Trump be re-elected.  His tariff claims are rejected by most traditional economists, who say the policy would do little to expand employment in the US, while raising costs for everyday Americans and slowing growth around the world.

Today in Global Small Business: What the New China Tariffs Mean for World Trade

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What's affecting me, my clients, my colleagues and other global small business owners:

• What the new China tariffs mean for world trade.
• U.S. import tariffs have dealt free trade a heavy blow.
• The impact of U.S.-China trade tensions.
• Quote of the week:  "The benefits of a tariff are visible. Union workers can see they are "protected". The harm which a tariff does is invisible. It's spread widely. There are people that don't have jobs because of tariffs but they don't know it." – Milton Friedman
• Musk opposes US tariffs on Chinese electric cars.
• Biden outdoes Trump with ultra-high China tariffs.

A Critical Examination of Globalization

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In a recent Bloomberg Markets article titled “Everything You Thought About Free Trade Is Wrong,” Professor of International History, Quinn Slobodian was featured for his critical examination of globalization. The article explores Slobodian’s latest book, “Crack-Up Capitalism: Market Radicals and the Dream of a World Without Democracy,” challenging the prevailing narrative of free trade’s success.

Read on to learn how Slobodian questions the widely taught and assumed story of globalization that touts the benefits of free trade erasing borders and fostering prosperity.

Globalization Is Alive and Well

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Even as its justifications and the global economy change, the current skepticism toward free trade and globalization remains misguided. 

Yes, free trade is under greater attack today than it has been in decades, especially in the United States. 

Despite continued public support for foreign trade and globalization generally (even during the height of the COVID-19 pandemic), a bipartisan cadre of American politicians and pundits is increasingly skeptical of, or downright hostile to, the longstanding consensus in favor of trade liberalization.

America can join with more free trade or it can miss out.  Fortunately, rumors of globalization's demise have been, yet again, greatly exaggerated.  Globalization is alive and well, just changing. 

Free Trade Opens Doors to New Markets and Creates New Opportunities for Small Businesses

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According to Hector Barreto, chairman of The Latino Coalition and the former U.S. Small Business Administrator, "for businesses of all sizes and types – from manufacturers to farmers and ranchers – free trade opens doors to new markets and new opportunities. New and better-paying jobs are created."  He goes to say:

International trade is actually incredibly important to small businesses. It is a little-known fact, but 98 percent of all U.S. exporters are small firms. Nearly 300,000 small and medium-sized enterprises (SMEs) are exporting to foreign markets every day; those companies support around four million American jobs as a result.

At length and with great passion, Barreto explains why international trade is incredibly important to small businesses.

Free to Choose Global Trade

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The two main candidates for USA president both have it wrong.  Trade is good for us.  I'm pro-trade.  Even Nobel-prize winning economist Milton Friedman said:

"The social and moral issues are all on the side of free trade. And it is you, and people like you [a union official that challenged him on his bid to eliminate all tariffs over five years], who introduce protection who are the ones who are violating fundamental moral and social issues."

It's worthy of a look at Milton Friedman's Morals.  And see what else a bad trade deal can do to our global economy.

Leveraging the Growing Internet Usage

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According to eMarketer, the Asia-Pacific region is projected to capture 33.4 percent share of global e-commerce sales by the end of 2015.  Embracing e-commerce will accelerate access to international markets, promote innovation, create jobs and expand customer reach for business owners.

“We need to leverage on the growing Internet usage, burgeoning middle class, and the increasing accessibility and affordability of technology to enable our micro, small, and medium enterprises to enter the global market. E-Commerce has evolved into a regular marketplace option for many buyers,” she [Doris Magsaysay-Ho, 2015 chairman of the Asia-Pacific Economic Cooperation (Apec) Business Advisory Council (Abac)] added.

Read more:  'Free and open trade should benefit small businesses'

The Promise, Challenge and Opportunity of Free Trade

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What's there to be pessimistic about on free trade?

The default position portrays trade deals as a threat to American jobs and wages, exposing our economic weaknesses to the world, rather than as opportunities to grow our economy and maximize our strengths.

Find out what Thomas F. 'Mack' McLarty has to say with his opinion piece published at The Wall Street Journal.

Read:  Why Democrats Should Back the President on Free Trade
(Love the 1993 photo in this piece with Larry King, Al Gore and Ross Perot.)

Does Free Trade Only Create Rich People, Poor Communities?

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The Trans-Pacific Partnership (TPP) Treaty is:

a trade deal expanding on so called "next generation" trade and investment deals that NAFTA countries have pursued in the wake of the stalemate at the World Trade Organization.

Some refer to the TPP as the next generation of handcuffs.  Others, according to "Facing the Threat" below, think free trade creates rich people not rich communities.

What are your thoughts?

Related articles:

The Tyee - Facing the Threat of the Trans-Pacific Treaty

Facing the Threat of the Trans-Pacific Treaty - IPS 

Free or Protected Trade?

Hip Hip Hooray to Free Trade!

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Barbara Weltman, founder and owner, Big Ideas for Small Business, Inc., writes an article for American Express OPEN Forum, "Why Small Businesses Should Pursue Free Trade."

We are all for BIG ideas!  And we are totally for open trade.

Related articles:

Direct Exporting:  Advantages and Disadvantages to Direct Exporting

Indirect Exporting:  Advantages and Disadvantages to Indirect Exporting

What is the Export-Import Bank of the United States?

Posted by:  The Global Small Business Blog

Just Say "Yes" to Free Trade

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Daniel Griswold, director of the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute and author of “Mad About Trade: Why Main Street America Should Embrace Globalization” (2009), says:

Republican leaders in Congress have been ready from day one to advance free trade by approving three pending trade agreements, with South Korea, Colombia and Panama. President Obama also favors the agreements, as do enough congressional Democrats to ensure their passage.

While the agreements probably will not put a visible dent in the U.S. unemployment rate, they will create better-paying jobs and more prosperity for American households.

Read the entire commentary here.

Related post:

Mad About Trade and By Golly, I am Going To Do Something About It!

U.S. Commitment to Free Trade

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President Obama visited India and reassured the people of his strong support for a strategic partnership along with encouraging words about his commitment to free trade.

Read more here.

Related article:  Time to advance free trade pacts

Posted by:  The Global Small Business Blog

Global Free-Trade Network

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Did you know? Imports and exports equal slightly more than 20 percent of gross domestic product, the broadest measure of economic output? That's what Sung Won Sohn, an economics professor at California State University, Channel Islands, says.

Read more here. Do you agree or disagree with the reporter's piece?

Smart, Full and Focused

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This looks like someone we should follow: Paul Krugman, the Princeton University scholar and New York Times columnist. He won the Nobel economic prize for his analysis of how economies of scale can affect trade patterns and the location of economic activity.

The Royal Swedish Academy of Sciences praised Krugman for formulating a new theory to answer questions about free trade.

"What are the effects of free trade and globalization? What are the driving forces behind worldwide urbanization? Paul Krugman has formulated a new theory to answer these questions," the academy said in its citation.

"He has thereby integrated the previously disparate research fields of international trade and economic geography," it said.

Read more about Paul's background, at least as a New York Times columnist, here.