Navigating global trade
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Navigating global trade

Between Trump, Iran and Brexit, the business of global trade has become an volatile place. Our Mark Brannan tells you how to ensure smooth sailing.

When it comes to global trade, there are few eras in history where the world has seemed a more volatile place than it is right now. From Donald Trump to Brexit to NAFTA to Iran, the list of conundrums, disagreements, disputes, problems, and challenges is as long as the stakes are high.

Take a look at some recent headlines.

From Vox news: President Donald Trump is on the verge of what may be the greatest escalation in his trade war with China yet.

From Bloomberg: NAFTA talks are picking up again as the U.S. and Canada each wait for the other to blink.

From Reuters: An adviser to Iran’s oil minister said on Tuesday that expected U.S. sanctions on Iran’s energy sector could not reduce the country’s oil sale to zero.

Trade experts say that there is no greater risk to world trade today than the uncertainty being created by the volatile political environment.

Mark Brannan
Mark Brannan

''The global trade environment is in a state of flux. It’s very difficult for companies to plan their international supply chains and operations when the playing field is constantly moving,’’ said Mark Brannan, International Business Development Director at AEB.

Brannan said Europe’s trade environment is dominated by Brexit and will be until a conclusion is reached and probably long after.

He added though that the greatest risk will  be that companies will sit on their hands until the final details of the Brexit deal (or no deal) are known and that approach will put their business in the worst position possible.

‘’It’s important that companies look at the various scenarios that could occur and how these would affect their supply chains,’’ he said. ''What impacts would cross-border delays have? Are there any contractual implications caused by possible disruption? Will entitlement to preferences be lost? What would be the impact of increased duty rates? Would it make sense to switch to suppliers in other countries?’’

He adds that companies globally should not be lulled into thinking that NAFTA is only an issue for companies in the U.S. and Canada. ‘’Automotive manufacturers, for example, have a huge stake in NAFTA and have serious concerns about restrictions on trade access to Mexico,’’ Brannan said.

Global trade
Global trade

And along with both NAFTA and Brexit comes the dispute between China and Donald Trump, which is again threatening Beijing with $200 billion in tariffs on goods its companies trade into the U.S.

‘’The possibility of a ramping-up of the tit-for-tat tariff war between the U.S. and China could have serious implications for many manufacturers,’’ Brannan said. ‘’We’ve already seen the impacts the steel and aluminum tariff increases have had. A wider trade war could have major global implications.’’

At AEB, it’s our job to mitigate some of the risks of the global stage before the wind up at your company’s front door.

Our Customs Integration and Broker Integration solutions automate communication with customs authorities making cross-border trade and business simpler. We support the cross-border flow from continental Europe to a post-Brexit Britain by automatically creating, for example, the export declaration for France and the import declaration for the UK, allowing trucks to cross the border with as few delays as possible.

The Origin & Preferences solution supports companies with the management of free trade agreements and associated duty rates. Given the frequent changes in this area, the software aids companies to make the most of customs regulations, gain a competitive edge in this area, and increase profits.

Trade risks
Trade risks

And our Product Classification software automates the process of identifying the correct commodity code. This is a key component in the utilization of preferential agreements but additionally is needed for the correct calculation of import duties, and also identifying whether there are any export restrictions or bans.

Software products like those above allow companies to manage the current trade environment knowing they are in the best position possible no matter the politics of the moment.

‘’Companies need to become more agile and flexible in their global trade operations,’’ said Brannan. ``Any company taking its eye off the ball will lose out. They must keep a keen eye on global trade and react quickly to changes in regulations, tariffs, sanctions, or whatever the news day brings.’’