Global business has rarely been more uncertain. The future of cross-border trade and tariffs is impossible to predict, and the impact on currencies and supply chains is unclear.
Indeed, the heads of U.S. companies say trade and foreign investment policy is a top reason to change business strategy over the next three years. More than half of domestic producers say trade policies are one of their biggest challenges.
But there are ways to help address these unknowns. More-efficient global supply chains can release working capital. Businesses can be more agile by understanding local markets globally. From software developers to suppliers, working with partners that know the markets can help companies find ways to lower risk and find new options.
Global Lessons from Southern California
From her vantage point in Southern California, my colleague Charlene Davidson knows the impact of trade wars. With half of U.S.-China trade flowing through Los Angeles area ports, Southern California is on the front lines.
“In this environment, which remains uncertain, if you’re at all involved with a global partner, client, or materials source, then you need to be agile, adaptable, and smart,” she says. “During these times, liquidity, capital management tools, and trade finance strategies become especially critical to margin protection and the ability to reliably execute.”
Finding new suppliers and looking to other regions can also bring new ways to adjust to current trends. By managing liquidity, these companies can find advantages either to grow organically or through mergers.
“Over the long run, the most successful companies I’ve seen here in Southern California have been good planners, and have taken risks that were well thought out,” says another colleague, Joe Eitel, who has advised companies in Orange County for more than a decade.
Finding Partners for New Opportunities
Although Southern California’s economy has been resilient, businesses everywhere need to find partners that know how to steer through these uncertain times.
As part of BNP Paribas, we work with companies in more than 70 markets globally to help with complex trade issues and capital management. In this unpredictable era, I believe businesses need not only clarity about what they want to achieve, but also the agility to capture new opportunities.
This point-of-view is based on the article C-Suite Success and Global Trade Risks: Insights from Southern California.