Survey: COVID-19 Casts Shadow Over Organizations’ Trade Strategies
Just as it has radically altered daily life for most people, COVID-19 has had a similarly dramatic effect on the business outlook of small and medium-sized enterprises (SME) engaged in the global economy.
A recent survey by DHL found 49 percent of 2,000 respondents said the coronavirus had forced them to take a more conservative approach to their businesses’ global trade strategies. DHL said this was “no surprise” considering that “an overwhelming 78 percent of respondents have had business revenues decrease either slightly or significantly due to COVID-19.”
In spite of Asia being the epicenter of the outbreak, 32 percent of respondents said Asia remained a top business priority for them. In 2019, only 21 percent said so. “The year-over-year increase in confidence in Asia is likely due to progress in potential relief with China tariffs,” DHL explained. “Additionally, other countries in Asia, such as Vietnam and Japan, have emerged as top trade and manufacturing partners for U.S. businesses as a result of the U.S.-China trade war.”
Perhaps surprisingly, a declining share of respondents (30 percent vs. 55 percent in 2019) said North America was a top priority for their businesses. DHL said this could be due to a lack of awareness of the U.S.-Mexico-Canada Agreement (USMCA), even though the trade agreement, which replaces NAFTA, is scheduled to take effect this summer.
Many businesses, SME or otherwise, are taking a hard look at how they can adjust their supply chains to adopt to these new global trade realities.