Stagflationary Shock

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President Trump has had little reason to scale back on his global trade was ambitions.  If the new tariffs go into effect on Aug. 1, they could unleash the sort of devastation to consumers and businesses that economists have long worried about and that Mr. Trump has mostly avoided.

Their fear stems from the specter of a stagflationary shock, in which inflation intensifies as growth stalls.

Definition of stagflation:

Stagflation is an economic situation where high inflation, slow economic growth (stagnation), and high unemployment occur simultaneously. It is a difficult economic condition to manage because efforts to combat one aspect (like inflation) can worsen the others (like unemployment). 

The economy has been resilient.  For how long?  The new round of tariffs may hit harder.

Today in Global Small Business: The Economic Impact of Tariffs and Global Trade on Business

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

• Tariffs and global trade:  the economic impact on business.
• By declaring a trade war on the rest of the world, President Donald Trump has panicked global financial markets, raised the risk of a recession and broken the political and economic alliances that made much of the world stable for business after World War II.  Is it a sign of dominance or weakness?
• South Korean exports show signs of weakness and global 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
• U.S. showed signs of weakness even before trade tensions escalated.
• A look at U.S. exports to China 2025.

FINAL CALL: 9th Annual Global Small Business Forum 10/18/24 in Chicago!

©2024 Laurel J. Delaney.  All rights reserved.

Ready.  Set.  Let's go global!  There is still time to sign up for the biggest and best 9th Annual Global Small Business Forum, "Global Success Within Reach – The Bigger Picture," held in Chicago on Friday, October 18th from 8:00-11:30 AM CT.  Hear from a cast of experienced speakers who know the ins and outs to global expansion.

Our cast of speakers – like an Academy Award lineup but for experts and business owners who drive results through global expansion – is as follows:

• Angie Kappel, VP Foreign Exchange, Capital Markets, Associated Bank
• Tami Lange, Founder and President, Save the Girls
• Ellen Wheeler, Partner and Litigation Attorney, Foley & Lardner LLP
• Marc Schulman, President, The Eli's Cheesecake Company
• Amy Mills, Owner and President, 17th Street Barbecue
• Donald J. Lloyd, Senior VP, Manager:  Capital Markets – Foreign Exchange, Rate Swaps and Commodity Derivatives, Associated Bank (Moderator)
• Kirk Samson, Global Business Leader, Co-Founder, Samson Worldwide LLC and Global Business Consultant
• Richard Paullin, Executive Director, International Trade Association of Greater Chicago
• Yvette Laugier, Chairman Emeritus, Housewares Association Board of Directors
• Diamond Young, AVP Foreign Exchange | Capital Markets, Associated Bank
• Rajiv Khatau, Managing Director, LODAAT Pharma
• Valarie King-Bailey, CEO, OnShore Technology Group, Inc. 

Forum is sponsored by Associated Bank and hosted by Foley & Lardner.  

To learn more and to register, visit: https://globalsmallbusinessforum.com/.  I [Laurel Delaney] hope to see you there!

#successwithinreach

Obstacles to SME Participation in Global Trade

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A key finding in this section of a very robust report is that all types of trade costs, whether they are fixed or variable, adversely affect the ability of SMEs to participate in trade, to a greater extent than large enterprises.

Since SMEs are more sensitive to trade barriers than large firms, removing obstacles to trade benefits SMEs disproportionately. It is therefore important to understand what these major obstacles are.  You can find out here.

Today in Global Small Business: Imitation Isn't Enough With AI

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

• The ethical issues of AI; imitation isn't enough.
• Fears of trade protectionism are overdone.
• The fallout of Red Sea disruptions for global trade and inflation.
• Quote of the week:  "The freer the flow of world trade, the stronger the tides for economic progress and peace among nations. I've seen in my lifetime what happens when leaders forget these timeless principles. They seek to protect industries and jobs, but they end up doing the opposite." – President Ronald Reagan 
• World economic outlook April, 2024 from IMF.
• The World Trade Organization (WTO) at 30.

International Tax Laws On E-Commerce May Change Global Trade

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International tax laws on e-commerce may change the industry and global trade — perhaps not for the better, resulting in higher consumer prices.

E-commerce has enjoyed such a meteoric rise over the past decade that ordering pretty much anything online and receiving it within a few days is now routine for consumers all over the world.

Retail e-commerce sales rose to $6.3 trillion in 2023, from $1.8 trillion in 2016, and are expected to grow to $8.1 trillion by 2026, with 4.5 billion users worldwide — or roughly half the population of the planet, according to data tracking site Statista. What’s more, by 2026, e-commerce is expected to make up 24% of all retail sales, up from 18.8% in 2021.

The economics of global e-commerce may soon be changing, however, possibly making goods more expensive and forcing small business owners to pay much closer attention to international trade laws.

Geoeconomic Fragmentation

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Advanced economies are expected to slow from 2.6 percent in 2022 to 1.5 percent in 2023 and 1.4 percent in 2024 as policy tightening starts to bite. 

The baseline forecast is for global growth to slow from 3.5 percent in 2022 to 3.0 percent in 2023 and 2.9 percent in 2024, well below the historical (2000–19) average of 3.8 percent.

Given increasing concerns about geoeconomic fragmentation, part of the report assesses how disruptions to global trade in commodities can affect commodity prices, economic activity, and the green energy transition.  The report does not factor in the recent Israel-Hamas war – the latest Gaza conflict.

Could Protectionism Make the World Less Resilient, More Unequal, and More Conflict-Prone?

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There is no strong evidence of a retreat from globalization, but international trade and the multilateral system that underpinned it are under attack, and their future depends on policy choices.

Today, there is still no conclusive evidence that international trade is deglobalizing. When measured in US dollars, global trade growth slowed after the global financial crisis in 2008–09 and declined sharply at the onset of the pandemic in 2020. But since then trade has rebounded to the highest value ever.

Read on to see how there are some growing threats to global trade.

An Electronic Bill of Lading (eBL) Would Save $6.5 Billion in Direct Costs and Enable $40 billion in Global Trade

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Trade finance can be a huge booster to global trade—to make it accessible by ensuring that importers receive their goods and exporters receive their payments. But the core ecosystem—exporters, importers and banks—is complicated with multiple parties involved in a single transaction.

But according to a CEO of a global trade finance network, there are three factors at play that he thinks will reshape the future of trade finance. 

1.  There are still huge opportunities to digitize trade finance.
2.  Integration between financial institutions and fintechs will be key to future growth.

For example, one area is digitizing documentation and the bill of lading (BL). According to McKinsey, an electronic bill of lading (eBL) would save $6.5 billion in direct costs and enable $40 billion in global trade.

3.  The next wave of innovation in trade finance is in digital assets.

Read more here.

Despite a Cloudy Outlook, Global Trade Is Still Resilient

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According to DHL and the NYU Stern School of Business, forecasts for global trade indicate:

• Trade is expected to grow slightly faster in 2022 and 2023 than it did over the previous decade.
• Many companies backed away from reshoring and nearshoring plans, leading trade to grow faster in emerging economies close to China.
• Vietnam, India, and Philippines are benefitting, with Vietnam the biggest winner.

Trade is expected to grow slightly faster in 2022 and 2023 than it did in the previous decade, despite the headwinds of Covid, a global economic slowdown and the war in Ukraine.

Read on about how globalization of trade isn’t ending, despite Covid, war and inflation.

Should We Change the Top Global Currency?

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Giving up use of the U.S. dollar for global trade and reserve accumulation would be very difficult for U.S. adversaries and would require major economic adjustments, though it would be in the best long-term interests of the United States for the global use of the dollar to be more constrained.

Few topics have generated as much discussion in recent weeks as the evolving role of the U.S. dollar in the global trade and capital regime. The sanctions imposed on Russia by the United States and its allies have demonstrated the immense geopolitical power that control of the global currency system can confer.

Read on to see how these same sanctions also make clear, however, why the governments of other countries that might one day be subject to such penalties are doing all they can to opt out and establish an alternative global currency system—either one they control or one that is unlikely to be controlled by potential adversaries.

Today in Global Small Business: Artificial Intelligence (AI) and the Future of Global Trade

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

• Artificial intelligence (AI) and the future of global trade.
• Everyone in the world could have access to clean, affordable energy within the next nine years if countries modestly increase investments, according to new UN reports released.
• Looking for a job as a Global Marketing Coordinator in high fashion?  Stella McCartney is looking for one.  Apply now.
• Quote of the week:  "AI is a tool. The choice about how it gets deployed is ours." – Oren Etzioni
• How to prepare your website for localization.
• Surge in shipping costs globally could cause price hikes from toys to coffee.

Today in Global Small Business: Container Shipping is Booming Again

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

• The World Trade Organization (WTO)  highlights progress made on developing global trade and e-commerce.
• How President Biden must restore American trade leadership.
• Quote of the week: “Some people are so busy learning the tricks of the trade that they never learn the trade." – Vernon Law
• Cross-border paperless trade has great potential to not only grow trade competitiveness but also to address new challenges associated with e-commerce and the digital economy.  See what the United Nations (UN) and Enhanced Integrated Framework (EIF) are doing about it.
• Container shipping is booming again.  Will it last?
• The world's most important body of water.

The Global Trade Barometer and Economic Impact

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Every component of the Goods Trade Barometer, which provides real-time information on the trajectory of world trade relative to recent trends, will be influenced by the economic impact of COVID-19 and the effectiveness of efforts to treat and contain the disease,” says the World Trade Organization (WTO).

The Geneva-based body’s latest forward-looking Goods Trade Barometer stood at 95.5, compared with a level of 96.6 in November. 

The WTO goes on to say that global trade in goods will likely remain weak in coming months as disruptions from the coronavirus outbreak in China stanch the movement of international commerce already slowed by tariffs and uncertainty.

Laurel Delaney's Global Trade Trends Report 2020 (wegginar®)

©Women Entrepreneurs Grow Global®.  All rights reserved.

In today's fast-changing business world, it has never been more important to stay informed about key trends reshaping the global economy and position yourself to maintain a competitive edge.  And that is what Laurel Delaney will be covering in her upcoming Thought Leadership Series (TLS) wegginar® hosted by Women Entrepreneurs Grow Global®.  Not just what’s hot and what’s not but what you should be giving your undivided attention to.  Are you ready?

JOIN us for Laurel Delaney's Global Trade Trends Report 2020, a free wegginar® thanks to wegg®'s sponsors:  Bank of America, FedEx, Associated Bank, Greensfelder, APCO Worldwide, GlobalCare Clinical Trials and Union Pacific Foundation – all companies that generously support women business owners who grow their businesses through exports.

Laurel will unveil:

• Facts on the global small business market
• Growth in the USA economy
• How small is the new big

This will be a high-energy, information-rich presentation that will have you thinking about how to track what is relevant in global trade and position your global small business for success in 2020.

Participants will learn what's in store for 2020 on the following issues relative to global trade:

• U.S. China relations
• Brexit
• Freight
• Payment
• Warehousing
• Tariffs
• Privacy
• Digital trade
• +More

Laurel Delaney's Global Trade Trends Report 2020 will take place LIVE on Wednesday, January 8th at 11AM CT (12PM ET and 9AM PST).  Register NOW:
https://womenentrepreneursgrowglobal.org/2019/12/17/laurel-delaneys-global-trade-trends-report-2020/

Today in Global Small Business: Solo Businesses Are Brought Into the Entrepreneurial Ecosystem

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

• The Global Entrepreneurship Monitor (GEM) 2018/2019 have put a stake in the ground with their entrepreneurship studies by incorporating solo businesses into their research on entrepreneurial ecosystems.
• Who cares what Trump wants from global trade.
• Quote of the week: “Gratitude is not the greatest of virtues, it is the parent of all others.” – Marcus Tullius Cicero
• China's manufacturing is back in expansion mode.
• Shoppers ring up record Thanksgiving sales online; Black Friday’s (11/29/19) tally to exceed $7 billion, Adobe says.
• Why Small Business Saturday is more important than Black Friday (to UK folks).

Today in Global Small Business: If You Want to Lift Up Humanity, Empower Women

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

• Anytime is a good time to expand a business internationally.  Don't let anyone tell you otherwise.
• Quote of the week:  “If you want to lift up humanity, empower women.  It is the most comprehensive, pervasive, high-leverage investment you can make in human beings.” – Melinda Gates
• With global sales among franchisees doubling to $2 billion over the last five years, Waco-based Neighborly has become a household name.
• Entrepreneurs burn out and often walk away from their businesses before they reach the success levels they so longed to reach. They give up just before things “take off” in their business.  Find out why and what to do about it.
• Global trade and exportation of such good is an intricate, complex, and often difficult task that hinges on financing; trade financing.  Trade financing, much like many forms of credit providing, is a key component of the success of small to medium enterprises (SMEs), but that key is not always easy to obtain.  Learn how blockchain-based trade financing is playing into the equation.
• India is looking to fight a lonely battle on global rules for e-commerce trade at the World Trade Organization (WTO) with close to 70 countries siding with the US to have a multilateral mechanism.    

Today in Global Small Business: If You Have Armpits, You Will Love This wegginar® 4/10

©Women Entrepreneurs Grow Global™.  Used with permission.

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

• Co-founder Sarah Ribner talks about how to create a strong personal care brand (deodorant) with worldwide appeal; wegginar® 4/10/19.  Free-of-charge but you must register to attend.
• Quote of the week:  “This is a very exciting time in the world of information. It`s not just that the personal computer has come along as a great tool. The whole pace of business is moving faster. Globalization is forcing companies to do things in new ways.” – Bill Gates
• How to give your competitors no time to respond.  Practice SODA.
• Case study:  Mature markets as engines of export growth.
• 5 ways to keep your team open to change.
• Beware of darkening clouds hanging over global trade.

Global Trade is the Future of Business

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FedEx released an infographic that shows how small business leaders look at global trade as the future of their business and why it is important for policy makers to consider the impact on micro and small businesses owners.

Key finding:  A majority of U.S. small business leaders (82 percent) see increasing U.S. trade as beneficial to the U.S. economy, up from 76 percent earlier this year.

Access the infographic here.

Today in Global Small Business: From Startup to Global Expansion

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

• Harness cloud computing and at the same time find out key growth lessons from more than 50 startup owners using cloud computing. 
• For future growth and prosperity, the Brits, especially Prince William, have a big push on exporting.
• States are rolling out the welcome mat for global trade.
• Where are we now on global trade for SMEs?
• How to turn website visitors into customers.
• From startup to global expansion.  A dream come true.
• Listen in on the WEGGinar™, "Grow Globally by Offering Competitive Financing Solutions" and learn how NOT to lose a sale because you don't know how to offer good terms to your overseas customer.