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The right way to grow your business internationally

Expanding business by entering new markets with shipments of export cargo and import cargo in international trade.

The right way to grow your business internationally

The domestic market is enormous. However, it may not be enough to sustain business growth. Going global is often the most logical step for taking business to the next level. However, mistakes made when going global can be disastrous for your business. Let’s discuss the right way to grow your business internationally.

Verify that your would-be customers exist in volume

Before you start to market and sell products in other markets, verify that customers exist there. Just because a product or service sells well in your country, doesn’t mean it will do so in others. Compare your product to what is already there to get an idea as to whether or not you could move into that space. If your product or service is novel, you might become the dominant provider—if the target market is willing to adopt it. A market segmentation analysis could help you determine if it would sell.

Don’t assume that you’ll be able to convince foreign customers to trust your brand, especially if there is already a familiar, similar product in their home country. Do a product gap analysis against local products to verify that there is actually demand not satisfied by a local provider.

Understand the Legal and Regulatory Environment

You must understand the legal environment before you enter a market. Meeting packaging standards for different countries by itself can be a challenge. Business regulations have to be met, or you could be hit with fines and fees. This is especially true when it comes to certifying products as safe in accordance to local standards. Taxes are a tangled mess in and of themselves, and you have to deal with that in every market you enter.

Financing business ventures in another country can be a problem in and of itself. Foreign banks may be reluctant to deal with U.S. businesses because of onerous American tax reporting requirements. Consider working with a service like Lending Express to raise capital for your expansion.

Consider the entire business model

Once you’ve outlined a potential business model, total up the likely cost of delivering products and support services. This is the time to verify you can still clear a profit selling products in that market at the volume you expect. Be very careful about assuming you can raise prices to cover your costs. Perform a SWOT analysis to determine if the market would buy your product at the price you’d have to charge to cover your operating costs.

Target one market at a time

Take the time to thoroughly research each market and cultivate the relationships necessary for success. Establish executives who will focus on that market and recruit local talent for everything you need to do. Start marketing and delivering the product. Make sure your local logistics and distribution network is working. Track the market’s response. If necessary, tweak the product model or translation of marketing and tech support materials. A planned, focused initiative is more likely to succeed, and because it has your attention, you can respond appropriately to issues when they arise in a timely manner.

While the domestic market is enough for many small businesses, expanding into global markets provides incredible opportunity for growth when done right. Take the time to determine the right markets to expand into and plan your endeavor to maximize your chances for success.

Trump has imposed sanctions on shipments of export cargo and import cargo in international trade.

Trump’s tariffs: How will US construction fare?

President Donald Trump’s protectionist trade policies were initially intended to help the United States, and there are arguments that certain industries will benefit. Yet there are some sectors that report that they’d be hurt by his protectionist policies. The truth lies somewhere down the middle according to certain analysts.

Let’s take a closer look at the issue in greater detail and see whether the US construction industry stands to benefit from the Trump administration’s protectionist strategy.

The lumber industry

President Trump applied hefty tariffs on Canadian lumber. Prices rose 25 percent year over year, and lumber now costs 60 percent more than it did two years ago. This has raised the ire of the National Association of Homebuilders among others. While the intent was to spur greater reliance on US timber, some businesses were forced to import lumber from Russia to meet price and schedule commitments.

The construction industry

The steel and aluminum tariffs are going to raise the cost of these key building materials. For example, construction accounted for more than two-fifths of US steel shipments. Those higher costs could cause construction to slow down and impact infrastructure spending. The Trade Partnership, an economic consulting group, projects that around 30,000 jobs would be lost in the construction industry as a direct result of these tariffs.

Another issue introduced by the tariffs is price volatility. You can’t be sure what you’re going to pay for materials if you use existing suppliers. A potential problem for builders would be greater control over imports. If you can’t import what you expected from an existing supplier, you’ll be forced to find a new, American supplier and pay a higher price for materials. Contractors and subcontractors have to factor prices and price risk into their bids. This could cause a spike in price bids, potentially causing firms to lose out on work or end up working for less than their material and labor costs. Over time, as an exact tariff is established and manufacturers lock in prices, the uncertainty will decrease. However, it is certain that prices for infrastructure projects like roads and bridges will end up costing more to build.

The tariffs on Canadian lumber are having a far greater impact on the broader construction industry than the steel and aluminum tariffs. NAHB head Jerry Howard said that the construction industry was still in recovery mode from the Great Recession that really only ended once Obama was out of office. However, the industry is only at 66 percent capacity, so it has a long way to go.

The potential impact on consumers

The American Institute of Architects said that anything that raises building costs adversely affects the construction industry, and they’re not alone. The National Association of Home Builders brought up concerns that the higher material costs would eventually translate into higher new building costs. This could affect housing affordability. It could also slow down the construction of new buildings due to their higher cost.

In the case of new homes, steel and aluminum are about half a percent to one percent of the final price. It is the construction of multi-story and multi-family housing where the tariff has its greatest impact. Even multi-story buildings that are mostly made from concrete need steel supports, steel rebar, and aluminum window cladding.

Consumers will be indirectly hurt by the shift to domestic suppliers on such short notice. Domestic steel production cannot meet the demand that is currently being met by foreign suppliers. Businesses will likely experience delays as they wait for domestically produced steel. That increases construction timelines for infrastructure projects like roads, bridges, and tall buildings. This will impact the construction timelines for buildings in the surrounding area.

Trump’s policy of removing burdensome regulations and thus speeding up the construction process will not entirely offset the delays introduced by shortages of critical building materials. Reducing regulatory costs will reduce construction costs long-term but not fast enough to offset higher costs for lumber and metal. You’ll likely end up paying less for roofing liability insurance but not the supporting structure for the roof itself. Ironically, his upgrades in infrastructure spending only lead to increased competition for limited American materials. Repeal of bureaucratic regulations for the banking industry may lead to more mortgage lending. That will eventually fuel more residential construction.

The lumber tariffs are creating availability issues cause delays in projects. These delays add to the cost of projects while delaying the start of new ones. If a contractor can’t finish on schedule, then everything from new roads to new apartment buildings has to wait. Conversely, the expected positive economic growth from other Trump policies is expected to somewhat contribute to a boost in non-building construction.


President Trump’s policies are set to have a profound effect on the American economy. But in the short-term, his tariffs are expected to affect the supply of building materials and raise material costs while the construction industry is still trying to recover. We’re paying a clear short-term cost for hoped-for long-term gains.

Macroeconomic factors impact shipments of export cargo and import cargo in international trade.

How the Economic Climate Impacts the Logistics Industry

If you’re familiar with the study of macroeconomics, you’ll know that this relates to the core economic factors that impact on growth and the performance of key markets. Examples include inflation and the base interest rate, and macroeconomics remains concerned with how these factors combine to influence the structure and behavior of the economy as a whole.

The core principles of macroeconomics also enables individuals to understand how key indicators impact on specific industries. In the case of logistics, for example, there are a number of metrics that indicate growth or contraction, and understanding this crucial for businesses and couriers across the globe.

In the article below, we’ll explore this in greater detail, while asking what we should learn from this year’s first quarter figures.

Supply, Demand, and the CPI – The Key Indicators for Logistic Firms

From a headline perspective, perhaps the single biggest indicator is the performance of the manufacturing sector. After all, the haulage and logistics industry is focused on the domestic or international shipment of goods, so a robust supply of products usually correlates with growth in the logistics sector.

With this in mind, the start of 2018 brought bad news for the UK, with overall economic growth falling by half during the first quarter and manufacturing input declining at an alarming rate.

After the influential Purchasing Managers’ Index (PMI) had peaked at a four-year high of 58.3 back in November, March’s figures produced a disappointing drop to 55.1. This represents a quarterly drop of 3.2, on the back of unseasonally adverse weather conditions and the growing uncertainty surrounding the Brexit negotiation process.

This shows that the production of material goods and products has declined at the beginning of the year, creating a diminishing supply across a number of industries. This hints at marginally weaker demand for logistics service providers, particularly those who lend their expertise to small and medium-sized ventures.

Another key metric for hauliers to consider is the Consumer Price Index (CSI), which relates direct to inflation and the cost of living in the UK. This can have a dual impact on the logistics industry, as it influences both the cost of fuel and the prevailing demand for products across a wealth of markets.

In terms of the former, March saw the CPI drop marginally to 2.7 percent, while the headline inflation rate remained fixed at around three percent. Although this is higher than the Bank of England’s target of around two percent, last month did at least see a month-on-month drop in the cost of fuel in relation to 2017’s figures,

This has done little to assuage the cost of living crisis that exists in the UK, however, with households continuing to struggle with minimal levels of disposable income. As a result, customers have less to spend on goods in the current climate, with a weakening demand compounding supply issues and dealing another blow to the logistics industry.

The Last Word

As we can see, these key indicators can have a profound impact on the logistics industry in the UK, while they also offer an interesting insight into the current marketplace.

Clearly the sector is facing a number of short and longer-term challenges at present, particularly in terms of Brexit and the balance between supply and demand. Still, there is hope for the future, particularly with the weather conditions improving and inflation expected to fall incrementally throughout 2018.

UK and Malaysia can expect more shipments of export cargo and import cargo in international trade.

UK’s Post-Brexit Economic Diplomacy

Despite the national uproar and instability caused by Brexit, Britain’s foreign relations are still a high priority.

The UK Trade Envoy to Malaysia, Richard Graham, announced a pledge of $3.6 billion to enhance their mutual trade. The funds are made available from UK Export Finance, tallying up the total support offered in recent times to $6.5 billion.

Speaking publicly while visiting the Southeast Asia nation, Graham stated: “I am delighted to announce that the UK government, through UK Export Finance, is increasing financial support available for trade with Malaysia to £5bn, meaning billions of pounds of additional financial support to support UK exporters and their Malaysian buyers.” The move is one of the biggest in Graham’s tenure as UK Trade Envoy to Malaysia since his appointment to the role in January 2016.

What Might it all Mean?

The UK has endured difficulties in recent years. Britain is clearly striving to make a success of the Brexit dealings, despite the heavy struggle involved. British businesses are losing faith and the value of the pound has suffered greatly, as the UK economy at large begins to dip down from the impact of independence. Put simply, allies are needed greatly, after the leave vote has wounded international relations and the economy.

On the other hand, Malaysia have made a success of segregation since 1957, yet nurtures strong business ties with the UK after their long and shared history together. Consequently, some are calling this renewed partnership as exemplary of them both being ‘partners in the post-Brexit world’, moving forward together in prosperity. However, for Britain, it is likely more a matter of survival, an avoidance of burning more bridges after turbulent Brexit negotiations set them back. Ultimately, the British government need to be certain of something positive at this time, and are exploring this avenue accordingly.

A Big Plus for the Economy?

Other than strengthening the bilateral bond between the two nations, Malaysia can expect to have access to a higher quality of goods and services from the UK under more efficient conditions. Not only this, but the proceedings will run with a personal and efficient edge. For example, sourcing from the UK is made smoother for Malaysian buyers, with the ability to access finance in their own currency.

Furthermore, the economy is benefited by this level of cooperation, a quick and slick deal that delivers results immediately on both sides of the arrangement. Malaysian buyers will pump money into Britain and enhance the UK exporters, while their buyers can make calculated and clean investments for high quality goods. Ultimately, companies like London Capital Group track the financial markets and the economy at large, which should paint a reliable picture of the fallout for investors in the future.

Trust in the Trade Envoy?

Doubt has been placed in Richard Graham, the trade envoy for the dealings. Graham previously came under fire for comments about degenerative conditions on independence payments for the disabled, branded as “out of touch” before a speedy clarification. Ultimately, the Conservative MP has been embroiled in multiple controversies that have come under national coverage and scrutiny, and so his place in the proceedings may well throw the whole deal into heated discussion and suspicion. Only time will tell.

Marcus Turner Jones graduated in economics from the University of Sheffield before working in London and Madrid. His particular area of expertise are the Latin American markets. He currently lives in Buenos Aires as a freelance writer and investor, with his dog, Luna.

Use of rail is up for oil shipments of export cargo and import cargo in international trade.

Rail Industry Dependent on DC DC Converters for Growth

In the United States, the bulk of commuters are far from dependent on the country’s vast railway network to get around. However, rail has proved useful for the shipping of important products that help to keep the American economy going. One such product is oil, the transport of which has been supported by rail in recent months.

The protracted construction of the Dakota Access Pipeline may now be over, but a price tag of $4 billion and opposition from protesters may see oil companies turn to rail as a cheaper alternative. In many parts of the US where oil is a major employer, using rail links that already exist seems to make sense from a number of standpoints.

In order to ensure the safety of precious cargo such as oil, the national rail network is dependent on DC DC converters to fully operate. All the trackside equipment needed to keep freight trains moving needs these converters to run safely, managing changes in voltages without even the slightest hitch.

On the Right Track

If expensive oil pipes are to be shunned in favour of the railways, work will be needed to keep the tracks safe. Presently, the US has more than 140,000 miles of rail. Much of that is ready to use for freight trains to transport oil, coal, and lighter goods such as electronics and clothes. The role played by DC DC converters is huge, as they are used in many types of equipment.

With so much rail to manage, there is a lot of work needed to make sure it all runs as it should. DC DC converters for railways are essential for signal boxes, which manage traffic at busy crossings and junctions. They are used to power the levers that enable trains to go past one another safely, which is essential for the transit of oil in particular.

These converters are also used for communication devices that are used by staff and rail terminals alike. For railway workers, walkie talkies need DC DC converters to connect to some power supplies, as do in-cabin radios. Without them in place, a safe cargo trip from coast to coast becomes far more chaotic and difficult to track.

Safety First

The cabins of both freight and passenger trains are dependent on having the appropriate technology to work. Radios have enabled drivers to communicate from long distances, informing each other of when they are due to arrive at their destination. For the safety of valuable cargo and passengers, they make a huge difference.

Speaking of communication, displays are a major part of what makes the railway industry tick. DC DC converters help to power up displays such as traffic lights at crossings and departure boards at busy stations. These need to be updated constantly, for the safety and reassurance they offer to passengers and rail staff.

Passenger Numbers

Although much of the existing rail network in the US is currently being used for logistics, rail passenger numbers are experiencing some welcome growth. Figures from Amtrak revealed that over 400,000 extra passenger journeys were taken in 2016. A renaissance in passenger travel could put the rail industry as a whole in a strong position for the coming years.

The future doesn’t seem quite so certain for rail, but for cost-effectiveness, it may provide a short-term solution that would save billions on infrastructure spending. Rail will, however, need to have the necessary technology and capacity to handle any extra traffic.

Considerations in doing business in shipments of export cargo and import cargo in international trade with China.

Is China Really a Good Option for International Trade?

With a landmass that covers more than the whole of America and also a population of over a billion, it’s fair to say that China is quite a sizeable nation. By simply putting two and two together you’d assume that more people means more business opportunities, but when you consider aspects like China’s language barrier, political situation and significant internal production levels, it’s not that straight forward.

It’s almost like a vicious circle in that a business manager will know there are markets out there for them to tap into, yet with potential pitfalls in the way it does beg the question of whether or not China really is a good option for international trade.

A business can weigh these aspects as part of their decision making.

China’s Economy
China’s strong internal production and exports on paper suggest a wealthy economy, yet it is still classed by some as a developing economy, as in this article from the World Bank. As such it can indicate possible issues ahead for businesses looking to start working in, or targeting, areas outside of cities and urban developments.

However, despite this there are converse reports from this official guide for doing business in China, that the nation has been “the great economic success story of the past 30 years.” It claims how the country has gone from strength to strength and overall has seen a notable shift towards a receptive market-oriented economy.

Buying Power
This guide also goes on to explain how the markets that are available, are now the wealthiest they have ever been and that they have strong buying power. This is believed to have stemmed from a rising middle class which over this 30-year period has seen 70 percent of their population lifted out of poverty. Also, their access to technological advancements and online shopping, along with a reduction in the state control of these, has also led to greater buying power.

Again, however, one could safely assume that this is also within the more urban areas of the country.

Industries at a Glance
Another key consideration is the vast manufacturing industry China possess. Recent studies show that China is the world’s top exporter shipping an impressive $2.119 trillion worth of goods in 2016, with electrical machinery and equipment among the top products. Naturally, that’s good news for companies buying-in, but what about those who wish to export to China?

Well, the flip side to this is that there is still quite a hunger for raw materials from China to support this expanding nation. In terms of business opportunities this could be one potential trade option.

Additional Import/Export Information
Looking outside the general view of China, a business could encounter issues with more specific aspects and may want to ask questions like:

Is there a demand for the goods/services in my targeted area? As China’s attitudes and needs can vary massively around the country. As can variations on the local language.

What connections does my business intend to make with its Chinese counterparts? Their methods and approaches to doing business can be quite different to western culture, which could affect any long-term partnerships.

Is my business safe and secure to import or export any goods? There are still restrictions in place in China on certain items, but there is assistance available on correct processes and procedures, in pieces such as this shipping guide from TNT.

Is my company politically and socially aware? While the situation is much more stable now, there are still instances of unrest that could affect a business’ trading endeavours.

To answer the titular question, on the face of it, it would appear that China could indeed be a potentially lucrative option for international trade. It’s important to note though that this is once a business has thoroughly assessed the Chinese markets and made certain that they will be receptive to the trades involved.

Marcus Turner Jones graduated in economics from the University of Sheffield before working in London and Madrid. His particular area of expertise are the Latin American markets. He currently lives in Buenos Aires as a freelance writer and investor, with his dog, Luna.

Rising US dollar will yield more shipments of export cargo and import cargo in international trade.

Uncertainty Ahead for EU Economy

Prior to the US presidential election, growth forecasts for the EU economy were tempered by recurring problems within the European economic zone, namely negative interest rates, a weak dollar, and deflation. 2016 proved to be a turning point. President Trump was elected in the US and the British people voted for Brexit, which will see the UK trigger Article 50 in the next month.

Not surprisingly, this has had a marked effect on the EU economy, with future growth forecasts much improved. According to data from Oanda, we are seeing rising inflation and a stronger euro right now. In May last year, the euro was trading at 0.865 against the dollar, but it is now trading around the 0.94 mark. Unfortunately, this short-term recovery may not last.

A Turbulent Year Ahead for the Euro
2017 looks likely to be a turbulent year for the euro. With a slew of elections ahead, the prospect of victory for a National Front candidate in France’s forthcoming election has sparked fears of black clouds ahead for the euro. Political support for the euro is fading and analysts predict the euro to fall sharply against the USD in 2017. Rising interest rates in the US combined with strong economic data has strengthened the USD’s performance against the euro, but with Trump’s policies still unclear, there is every chance there will be further trials and tribulations in the Euro/USD.

Rising Inflation in the Eurozone
Inflation is rising in the eurozone, but the last quarter of 2016 saw strong economic growth. The European Commission predicts growth of 1.6 percent within the euro area, and 1.8 percent within the EU as a whole. The election of President Trump has stimulated the US economy. The Federal Reserve has indicated it may raise interest rates to counter rising inflationary pressures in the US, but this is unlikely to hinder the appreciation of the USD.
Exports were weak in 2016, but a surging dollar is good for EU trade, so exports of goods and services are expected to receive a boost in 2017. There is also increasing demand from emerging markets, which is good news for EU export businesses.

EU Exports See Strong Growth
Statistics published by Eurostat indicate that intra-EU exports are rising year on year. In 2002, the value of EU exports to other member states was 1.908 billion euros. By 2015, this figure had risen to 3.063 billion Euros. For 12 of the EU members, the value of intra-EU exports grew by 100 percent, but many of the newest members saw growth of more than 200 percent.

The majority of trade in the EU is between EU members. Most countries conduct most of their trade with their closest neighbors. Germany is the biggest trading partner of all EU nations, with the exception of Cyprus. The United Kingdom is the only country with significant trade agreements outside the EU. Manufactured products represent the largest group of exported goods, which include cars, machinery and chemicals. Food, energy and raw materials make up the rest of intra and extra-EU exports.

With so much political strife on the cards, there are uncertain times ahead for the eurozone, but in the short-term at least, EU exports look set to enjoy a period of growth following a poor 2016.

Marcus Turner Jones graduated in economics from the University of Sheffield before working in London and Madrid. His particular area of expertise are the Latin American markets. He currently lives in Buenos Aires as a freelance writer and investor, with his dog, Luna.

The fall in value of the British pound has allowed UK exporters to ship more shipments of export cargo and import cargo in international trade.

Are UK Exporters Benefiting From Brexit?

In the months leading up to the Brexit referendum there was a great deal of anticipation, albeit tinged with anxiety, as to whether or not the UK would be acting in its best interests in exiting the EU. As of June, when the votes were counted, it was evident that the majority of voters was ready to break free of all the baggage that came along with being a member of a union that was seen as a drag on their own economy.

However, once it was a done deal and a final exiting was in the forecast, a cloud of uncertainty began to form, especially for SMEs that rely heavily on exporting to the EU. The question is, are exports benefiting from the impending exit or are they being harmed?

The GBP at the Heart of the Issue

The first thing to consider in any kind of trade is the value of the currency a company is dealing in. For the UK, the fall in the pound is a double-edged sword. Immediately after the Brexit vote, the British pound fell drastically against the U.S. dollar, a major forex pair commonly traded, which made it bad for the economy in some regards but actually a boon in others.

Exports were seen to benefit, according to a report by the BBC. Tourism also benefited as foreign tourists, especially from the United States, were paying less than previously for bookings in the UK. But on the flip side, UK tourists abroad were paying more due to a fall in the value of the pound.

Controversy over the Brexit Process Still Abounds

When David Cameron resigned following the Brexit results and the new Prime Minister Theresa May took office, nothing really changed in the eyes of voters. There was still controversy going on within the ranks as voters still held their ground on either side of the issue. Even so, when Prime Minister May announced mid-October her plans for invoking Article 50 in March with an aim of having completed the exit sometime in the summer of 2019, members of Parliament began immediately to contest this move on her part. Nothing will be known in regards to a decision on whether or not MPs can halt her invocation in March.

The Bottom Line – UK SME Exporters Are Likely to Benefit

So then, with the pound having lost much value against other major currencies and thus worth less when making purchases, it is also rather a benefit to those SMEs exporting goods because those trading partners find a more equitable trade in currencies. On the other hand, with Brexit also comes a great deal of uncertainty within the EU and those are Britain’s biggest trading partners. If those economies remain stable, which at this time is doubtful at least in the short term, exports will be as normal if not better.

But, with the outcome of the recent referendum in Italy along with upcoming elections in major countries in the EU, such as Germany and France, there is still lingering doubt about whether the EU will survive the coming years or have to be dismantled. For now, SMEs are seeing a benefit in exports but the future remains unclear.

Marcus Turner Jones graduated in economics from the University of Sheffield before working in London and Madrid. His particular area of expertise are the Latin American markets. He currently lives in Buenos Aires as a freelance writer and investor, with his dog, Luna.

China wants to rival US as leader of global system that governs shipments of export cargo and import cargo in international trade.

Xi’s Vision for China in Global Market

Last month, China’s President Xi Jinping vowed to lead global trade, in that he would ensure China was open to trade agreements globally. In a move considered to be taking advantage of Donald Trump’s election victory, President Xi’s vow came following Obama’s trade liaison with Japan. Xi offered his vision of a Chinese led system in which they are open to trade and invest, fully involving China in economic globalization.

Toward the end of the year, it is commonplace for many people to predict the forthcoming year’s financial stability and forecast. With global economics being in the precarious state they are, it seems to be a trying time for China, who need to keep their annual growth at the 6.5 per cent it currently rests at. This is down from 6.7 last year.

Xi’s vision

President Xi is making a clearly strategic move to improve relations between China and the U.S., the world’s two biggest economies. Given Trump’s move to work towards economic and energy independence for the U.S., Xi has picked a strategic time to talk about leading the way with his open trade agreements, as Beijing needs stability. The UK, too, is in a place of uncertainty regarding free trade, due to its imminent exit from the EU.

Xi said last year that he had hoped to create a currency to rival the dollar and bring it down from hegemony. However, the recent performance of the yuan suggests that this is a long way off yet. That said, 2017 is still an unknown territory and could see a huge swing in the value of the dollar, which remains volatile and linked to the changes in the cabinet due in January.

Yuan in global markets

The global economy has been something of a moveable feast for the latter quarters of this year, following both Brexit and Trump’s election. Traditional safe haven currencies have even fluctuated against the unstable dollar. The Chinese yuan has seen a noted depreciation following this surge in the dollar. Foreign exchange traders using metatrader platforms have seen an decrease in value of the Yuan as it hit an eight year low last week. However, speaking to Chinese media, Yi Gang, the deputy governor of the People’s Bank of China said that the currency is still strong and stable. It is stability which the dollar lacks, and with Trump’s presidency officially starting in January, some advisors think the yuan should be left to depreciate further, in order to see how it fairs up in these times of instability.

President-elect Trump used China’s economy to accuse the country of currency manipulation throughout his electoral campaign, also saying that he plans to add 45-percent trade tariffs on goods imported from that country.

The message here is that while the dollar may be riding high currently, it is volatile, whereas the yuan is already stable and is being lowered strategically.

Marcus Turner Jones graduated in economics from the University of Sheffield before working in London and Madrid. His particular area of expertise are the Latin American markets. He currently lives in Buenos Aires as a freelance writer and investor, with his dog, Luna.

Success of Argentina's economic reforms will have an impact on shipments of export cargo and import cargo in international trade.

How Argentina is Stepping Back into the Global Markets

Over the last decade, Argentina has been in the headlines for all of the wrong reasons. Weathering multiple political and economic storms, its recent history has been defined by defaulting on its debts, fears of nationalization, and the age-old Argentinian rhetoric of Peronist populism.

Yet now it seems that change is on the horizon. Following the election of Mauricio Macri as president at the end of 2015, a hunger for reform has seized the nation, and its new leading light has been keen to help it regain its former place at the heart of the global markets.

Nine months on, we look at how he’s doing.

A Momentous Challenge

Throughout the Argentinian election campaign, victor Mauricio Macri made no secret of the fact that the elected party would face a momentous challenge, and the rest of the world could hardly have doubted it either. After a decade and a half defined by political and economic upheaval within the country, his job looked set to be one of the hardest in the geopolitical sphere.

Indeed, the country had been almost entirely shut-out of the global capital markets since 2001, when it had defaulted on its debts. It had repeated this less than inspiring habit in 2014, following a battle with U.S. hedge funds that had speculated in the restructured debt.

By 2015, the fallout from this extended beyond Argentina’s public reputation, and had long since begun to affect its private enterprises too. Foreign investment was scarce, compounded by the added fear of nationalization.

Such speculation was not without merit. Those watching from the outside had already seen Argentina’s state oil firm, YPF, re-nationalized in 2012. Originally privatized in 1999, the Spanish firm Repsol had held a significant stake, but was eventually forced to settle for $5 billion in 2014.

These were the factors that Macri was faced with, and these are just some of the issues that he’s had to try and address in the aftermath of his victory.

President Macri’s Changes

In November 2015, when Macri was elected to office, the question on everybody’s lips was was not whether radical changes to economic policy would be implemented, but what form they would take. It was always known that the victorious center-right candidate would turn the existing state of affairs on their head, but what many wondered was whether his fixes would be enforced immediately, or gradually over time.

In the event, the former approach has been closer to the mark, with a decision made to administer unpleasantness sooner rather than later.

Most would argue that this was necessary considering the sorry state of affairs that the country had found itself in. President Kirchner had reigned for the preceding 13 years, and Macri was only the third man in power since 1983 not to have preached some version of Peronist populism.

Under these former scions of Argentina, the country had turned its back on the global financial system. Although brokers like City Index can attest that it maintained its prosperity during much of this period, this was due to two factors alone, both largely out of the hands of those in power: currency devaluation prior to the country defaulting on its debt, and the commodities boom of the early years of the millennium.

Indeed, there is a strong argument to suggest that the soaring sales of soy beans, corn, and oil were so momentous that they alone could have catalyzed such growth.

Yet this trend was not to last, and as the value of these commodities experienced a sharp drop over the years, those in control of the country were forced to resort to printing money to make up the shortfall. This was pumped into Peronist-style social programs, while capital and price controls were introduced in an attempt to keep these policies in check.

Such an approach was an unmitigated failure: inflation soared, totalling double-digit figures for several consecutive years. Basic goods were suddenly in short supply. What’s more, foreign currency reserves depleted. The situation became so bad that the government eventually resorted to misreporting its economic statistics.

Change in the Air

Unsurprising, then, that on the back of this, voters sought change in the form of now President Macri. Plagued by a mild yet enduring recession, and with the existing approach seeming unlikely to deliver much in the way of growth, the majority spoke, albeit by a small margin, and change became inevitable.

The first move that Macri made was to try and dismantle capital controls. His aim was to dramatically devalue the Argentinian peso, and indeed there has been a significant decrease in its performance through 2016.

He also announced an intention to negotiate with Argentinian bondholders, in order to restore access to the global markets, which had so long been denied. This was part of an overarching attempt to transform the country into a reliable and profitable investment destination.

These ambitions have not been easily achieved, however, largely due to the Peronist legislature of former parties, which has often proved at odds with President Macri’s intentions. Further moves have been thwarted by the Argentinian Supreme Court, such as an attempt to quadruple the price of gas.

Yet despite these roadblocks, the sense of imminent change is undeniable, and Macri remains determined to obtain his end goal. For investors, this has proved enticing, and the possibilities posed by such a sizeable economy re-joining the global community have not gone unnoticed. Although it may take years, Argentina is on its way back to the forefront of the international markets. Intelligent traders know that this simply cannot be ignored.

Marcus Turner Jones graduated in economics from the University of Sheffield before working in London and Madrid. His particular area of expertise are the Latin American markets. He currently lives in Buenos Aires as a freelance writer and investor, with his dog, Luna.