How To Kick Trade Anxiety Out Of Your Business In 4 Steps
4 Steps To Kick Trade Anxiety
Watching the news these days really takes the wind out of trade sails. Compared to previous years, trade nowadays seems far more risky. Each day we field calls from worried importers?
"Will there be surtax applied on my goods in the future?"
"Will NAFTA dissolve?"
"I signed a year long commitment to purchase goods that now carry an unreasonable amount of duty. What can I do?"
Whether you are currently importing or looking to expand into an international market, you may share these queries. And although there are many questions left to be answered at this time, it does not mean you cannot take action to alleviate some of the uncertainty and accompanying anxiety.
So here are our top 4 tips on how to curb your trade anxiety and forge forward with your trade plans.
Step 1: Arm Yourself With Trade Knowledge
Perhaps step away from the news feed and do some research on what can and cannot happen. Can NAFTA be dissolved overnight? Nope. Is there an existing bilateral trade agreement between Canada and the U.S.? There sure is. However, it is out of date and will take some work to make it current.
Can you claim back surtax paid if it is significantly harming your business? Possibly. There are certain criteria to meet, but it is an option.
The point here is that you need to understand what options you have, how quickly you need to move and how your company will be impacted if and when the trade winds change. In times of uncertainty, get as certain as you can.
You can seek this council from International Trade Lawyers, who are perfect for large companies or Trade Advisors for small to medium sized businesses. Both will gain an understanding of your questions and lay out the options you have currently as well as bring any potential issues to your attention. Together you can create an action plan for some of the expected outcomes.
Step 2: Research Financing And Other Trade Support Opportunities
There are many opportunities for financial assistance that go underutilized. There are entire government entities that have a sole purpose of facilitating trade by offering support. Here in Canada importers can work with EDC, or Economic Development Canada, who provide risk insurance, financing and working capital assistance to companies wanting to expand internationally.
Recently, the Government of Canada announced a Surtax Remittance process where those companies negatively affected by the imposed surtaxes that came into effect on July 1, 2018 can apply for a refund.
Are You Eligible To Request Remission Of Canada's New U.S. Surtaxes?
The Canadian Trade Commissioner Service is available to all Canadian companies looking to expand into new markets. They will team you up with your own Trade Commissioner who specializes in your industry. This partner will help you map out an export plan and connect you with their extensive list of network contacts across the globe.
Step 3: Spread Your Goods Thin
The advice we give out the most these days is diversify, diversify, diversify. Although it is not the goal, some companies may find themselves in a situation when one of their clients can make or break them financially. This is a dangerous situation to be in, especially if your client is from another country and you are acting as the Non-Resident Importer (NRI) in order to deliver your goods to their door.
Non-Resident Importer Guide
So our advice is to begin seeking additional markets in which to sell your goods. Regardless of the current trade landscape, diversification can create sales stability. However, like all business ventures, it is not without its share of risk. Utilizing organizations such as EDC and the Trade Commissioners Services can help you in this area.
On the flip side, if you find yourself purchasing your goods from one international supplier, now is the time to look for alternatives. If you are locked into a purchasing agreement, speak to your supplier and determine if your long standing relationship can relieve some of the financial impact you may be experiencing from unexpected and increased duty.
Working with a Freight Manager and Trade Advisor can help you source from Countries that may offer preferential duty treatments or have a current Free Trade Agreement in place. A Freight Manager can help you determine the shipping costs from this new location. From there you can calculate your anticipated landed costs from these new locations and compare it to your current costs.
Step 4: Do It Now
Let's say you are walking down a forest trail when a bear steps on to your path. Hopefully your instinct is to freeze and back away slowly as the experts advise. Reacting to threats in trade should not have the same approach. Do not freeze and back away. Do not even pause to 'see what plays out'. Act now! Buy, sell, trade your heart out because few duties are retroactive (typically only found in Anti-Dumping and Countervailing cases where companies were found to have been undercutting the domestic market), and they can not tax what is already in the country. So, do not wait, act now.
If you are new to importing internationally, know that the setup process typically only takes a couple of days provided the paperwork is filled out correctly and completely. Working with a Customs Broker allows for swift business registration and import bond implementation.