Transatlantic Trade Monitor: Facts You Need Now | International Trade and How to Thrive in the Trump Era

“May you live in interesting times” – this backhanded well-wish may never have been as applicable as it is today. Since January, the news cycle has been a steady stream of market-disrupting announcements, false starts, military escalations and political and economic gamesmanship that has humbled economists and wonks who normally have strong insight on things to come. Interesting (unstable) times can be challenging for any business, and regardless of political leaning, no one can deny that since Trump’s return to the White House, economic conditions are in flux, and uncertainty is high.

So far this year, the most disrupting and destabilizing factor to the global markets has likely been Trump’s constantly evolving announcements on trade and tariffs. Naturally, markets prefer predictability, and as we wait to see how these tariffs and trade war threats play out, very little appears predictable. This political and economic tumult is impacting every economy and business vertical in the world, and poses some unique (even unprecedented) challenges for business.

However: unique challenges come with equally unique opportunities. Sweet lemonade can be made from sour lemons, and companies who make the right moves in times like these stand to strengthen their positions considerably. The question is: how can companies, particularly companies outside the US, make the most of these conditions rather than simply trying to survive them?

To identify and understand the risks and opportunities, we need to dive into the details of the conditions we are facing, good and bad:

Prohibitive Tariffs

Admittedly, some of what we are seeing was expected — Trump has never been shy about his penchant for tariffs. He leveraged them in his first term with mixed results, and during his reelection campaigns he vowed expanded tariffs, in some cases promising what amounts to a multi-front trade war. Most people with any inkling of what was to come in 2025, knew that tariffs would likely be a favorite tool in Trump’s belt upon retaking office.

However, the timeline and extent of the tariffs have taken a lot of people by surprise, including industry and trade experts. For example, the concept of off-and-on, simultaneously applying onerous tariffs on nearly all of America’s trade partners was not on many people’s radar. Whether all this will really come to pass, whether Trump’s desired effect the tariffs will be achieved, and exactly what that desired effect is, all remain to be seen. It will likely take many months, even years, to fully evaluate these tariffs’ impact. What we can see in the meantime is this:

The Tariffs Are Hammering Mainland China

America and the People’s Republic of China seem made for each other, where trade is concerned. With its large and wealthy middle class, its near-addiction to consumption, and its strong currency, the US is a uniquely qualified consumer. Likewise the PRC, with its willingness to manipulate its currency, appropriate external intellectual property, and leverage its incredibly cheap (in some cases even forced) labor, is a uniquely qualified producer. America’s dependence on cheap Chinese goods has driven immense economic growth for the PRC and enabled unimaginable expansion on nearly all fronts of its development in the past three decades +. Since the 1980’s, Beijing’s playbook has been clearly written with the ending that, barring a change to the status quo, the People’s Republic will replace the United States as the supreme global force – not only economically, but politically and militarily as well – and exporting to the US is the PRC’s key fuel in its drive to the top.

However, the PRC’s singular focus on American dependency has also placed the massive exporter in a tough spot. Trump’s unexpectedly high tariffs are posing a significant threat to the Sino-American status quo on which the Beijing has based its geopolitical ambitions. Moreover, the simultaneous layering of tariffs such as on Canada and Mexico (America’s first- and second-biggest trading partners, respectively) threatens to narrow tariff loopholes which were left open in Trump’s Mainland China tariffs in his first administration. Despite the PRC’s responding with stringent retaliatory measures, its economy is clearly showing signs of heavy strain, as activity in its biggest production and logistics centers are slowing.

But with the ever-present threat of tariffs looming over every exporter in the world, why should producers in any country strengthen its focus on exporting to the US in the Trump era?

A Vacuum for Foreign Goods From AMEA, Latam, and Oceania

Simply put, America remains a very strong consumer. Even with the US dollar’s purchase power diminishing as result of the tariffs, there is still tremendous potential upside to selling in the United States. Inevitable price increases on everything from foodstuffs to electronics to textiles will hit Mainland Chinese exporters and American consumers in the short term, but can also present an opportunity for other foreign manufacturers in the medium and long term: manufacturers outside the PRC can now actually compete for American dollars on a more level playing field than has existed in decades. Manufacturing quality, corporate social responsibility, and provenance – long largely overlooked by US consumers in favor of PRC’s incomparable cost advantage – can again be major factors in American’s purchase decision. Even with the shifting on-again, on-again threats of tariffs on all exporters, the most burdensome tariffs being targeted at Mainland China gives non-PRC exporters a huge advantage.

As an Exporter, What Should I Have My Company Do?

1) Be open to taking action – yes, uncertainty is scary, and this is no time to act hastily – but it’s no time to stand still, either. Action or inaction without proper evaluation increases your company’s risk; so recognize these times for what they are: a stringent challenge and a strong opportunity. Consider your options, including the prospect of exporting to the richest market in the world with the strongest competitive position your organization has seen in a long time, possibly ever. Your competitors will be eyeing the same opportunities, so don’t be hasty but don’t let the iron cool unduly before taking the steps appropriate for your company.

2) Reevaluate the potential competitiveness of your products in the US market – As the playing field shifts, consider the various upside and downside to expansion into the US market, including factors like logistics challenges, competitor offerings, and 4 Ps of marketing for your products. Also consider the impacts of possible future changes, such as new tariffs on your nation’s imports, to play through what-if scenarios and action plans.

3) Evaluate your options for entering or US market expansion – if you already have a presence, consider and weigh your options for growth. Think about how you can strengthen your position in the US market and what actions you can take to gain market share. If you don’t yet have a presence in the US, consider what business model you want to have (direct presence, sales relationship, direct end-user sales, etc.).

4) Leverage organizations and firms who can help you – finding the right partners can pay huge dividends. As noted above, the US market can hold huge value potential for foreign entities, yet nearly half of companies that enter the US market fail for a variety of reasons; joining organizations like the European American Chamber of Commerce, or leveraging consulting firms like ours, Sambaluk Consulting, and similar entities. Doing this can help you increase your profile, establish partnerships with local importers/resellers, gain valuable insight, and decrease your risk to gain the best advantage in this highly lucrative market.

Putting It All Together (Too Long, Didn’t Read)

Especially in uncertain market conditions like these, firms need to control what they can and minimize what they can’t. These gale-force winds of change are bringing formidable challenges but also singular opportunities, and the companies that take careful advantage of these opportunities and avoid acting out of fear are the ones who will fare the best. It can be tempting to simply retract, wait out the storm, and hope for the best – but remember, taking advantage of conditions like these can actually minimize your company’s risk. Seek insights, evaluate your position, and weigh your options so that you can take steps to make the most of these interesting times.

Compliments of Sambaluk Consulting – a member of the EACCNY