Steel.. Aluminum.. Is your business next? What to do now? [Guest Columnist]
Is your business prepared to handle U.S. tariffs?
TORONTO—Today is June 1st, 2018. Not only does this date mark the beginning of the summer but also the beginning of the worst trade confrontation between Canada and the United States. Just to get you up to speed, the States introduced protective duties on steel and aluminum products of 10 per cent to 25 per cent effective today. This will immediately impact you if you are in steel and aluminum business and will impact if you manufacture or buy anything of those metals (automotive and aerospace parts, fabricated metal products), or use aluminum cans to package your beverages, for example. Yes, a can of beer will be more expensive, and that’s bad news for a short Canadian summer!
This is not the first action of the U.S. of this kind. There is still extra duty for the Canadian softwood lumber. Even the Bombardiers of the world are not immune to the unfriendly actions. So, will your business be impacted? Is it next on Trump’s list? Well, I am not a psychic, and I don’t have a Cerebro machine to read the President’s mind but let me give you a rule of thumb.
Look at the share of the different geographic markets in your supply chain and in your sales. If you source most of your inputs in Canada or the United States, or if Canada or the U.S. are your only markets, I am sorry to say this, but you are in big trouble.
You see, the world has changed dramatically. To survive and prosper you must diversify your supply chain and your export markets. Welcome to the new reality.
But how? Where to start from? What to do now?
First of all, take a good look at your products, and pick the most competitive and the most adaptable ones.
Then start talking to as many trade promotion organizations as possible and seeking who could introduce you to potential partners, clients or distributors outside North America. The organizations include the Trade Commissioner Service, provincial or territorial government export promotion organizations, industry associations and national chambers of commerce or business associations. Do your homework and learn to navigate international trade data to narrow down the list of potential export markets.
On the supply chain side, list everything you need and find out which countries export those supplies by looking up trade flow data using United Nations Comrade Database, Trade Data Online or similar tools.
Look, you have to start somewhere. So, start with selecting the right product and building your international network right here at home, in Canada.
I do understand that you probably are a risk averse person and exposure to unknown foreign markets is a risk for you. But listen, nowadays it is way more risky to rely on the United States than to diversify your supply chain and foreign sales. Once again, if you want to avoid the risk and ensure the long-term prosperity of your business, you must diversify. In fact, there are many Canadians that did just that. The other Canadians in the governments’ foreign offices are available to back you in the foreign markets.
To finalize I wanted to cite one of my favourite quotes:
“What separates the winners from the losers is how a person reacts to each new twist of fate,” – Donald Trump.
Let’s not be a country of losers. Our prosperity and that of our kids directly depends on how we react to this trade conflict that will only escalate. Let’s start diversifying our markets now. We are already late, and the train is departing, but it is still in the station, and the last door in the last car is still open. Let’s catch that train!
If you are interested in learning how to select the right product, source or export market, develop your global competitive advantage and profile your ideal foreign buyers or suppliers in a practical business learning environment tailored to your products and business, you are welcome to join an Intensive Export & Import Bootcamp on July 24 at 4:30 p.m. in Toronto, Ont.
Can’t make it in person? No problem, as we will be streaming live and recording the workshop for registered attendees.
Should you wish to discuss how to ensure the long-term prosperity of your business through supply chain and export markets diversification and reduce the damage caused by the trade restrictions, don’t hesitate to contact me.
And please, share this message with your business community.
For more helpful information on exporting, visit ExportEdge, an essential tool for all Canadian companies interested in exploring business opportunities in international markets.