Companies Worldwide Optimistic About Future Trade With U.S.
Global companies are positive about plans for future trade activity with the U.S., according to new research conducted by the Economist Intelligence Unit on behalf of American Express.
The research found that two-thirds of survey respondents anticipate that their company’s trade with the U.S. will increase over the next five years and 43 percent expect an increase of more than 10 percent.
The research, entitled, “Terms of Trade: Understanding Trade Dynamics in the U.S.,” is a survey of 531 executives at companies worldwide examining global trading relationships, looking at how companies trade, the challenges they face and how they expect international trade with the U.S. to change based on recent trends.
While opportunities for trade abound, international trade is not without difficulties. Exchange-rate volatility presents the largest issue for companies, with more than four-in-ten respondents citing this as a concern. Nearly one-third of respondents cite transport costs and delays, trade-related infrastructure, and making payments as their top challenges.
The survey catalogued payment-related challenges to international trade, including currency fluctuation (61 percent), which caused the greatest challenge, process inefficiencies and limited payment visibility (each, 52 percent), bank fees (51 percent), limited or no terms (50 percent), and banking hours (50 percent).
“Optimism about the outlook for global trade presents opportunities for U.S. businesses looking to export internationally,” said Guillermo Brenes, Vice President of Global Currency Solutions at American Express. “The survey shows that a number of the challenges to international trade are within the span of a company’s control, so there are practical ways in which companies can improve upon their own trade experience.”
Survey respondents gave high marks on the overall quality of trade-related infrastructure in the U.S. Over two-thirds of survey respondents rate the U.S. infrastructure as very good or excellent, and only two percent consider it to be poor.
The findings are based on an executive survey of 531 companies that trade with the US, conducted by the EIU in March and April 2016, as well as desk research and interviews with experts.
The survey sample included companies in Asia-Pacific (49 percent), Europe (22 percent), North America (19 percent), and South America (nine percent). Nearly half of those surveyed are c-level executives, and another 40 percent hold senior executive positions. The firms in the survey are split almost evenly between those with an annual revenue of $250 million to $500 million and those with $500 million to $1 billion in annual revenue. Of the 23 sectors covered, the best-represented were financial services, manufacturing, consumer goods and services, IT, and retail.