Not that the rest of President Trump’s first two months in office hasn’t felt like a whirlwind, appreciated by some and vilified by others, but it’s his executive orders on tariffs and trade that have taken the most “on-again, off-again” profile.
The latest such order imposing a 25% tariff on all cars and car parts shipped into the United States, including American brands whose automobiles are assembled overseas, could also be subject to change as market and consumer reaction to the likelihood of higher new car prices sinks in.
What a great time to be doing business overseas.
“Wait a minute!” you’re likely thinking. “Trump’s executive orders on trade account for 17 of his record number of 104 EOs so far, which is far from a picture of stability.”
True enough, but as a 35-year veteran of Wisconsin’s import-export economy told a group of entrepreneurs meeting this month in Milwaukee, the numbers still dictate that small and mid-sized companies should think seriously about markets beyond American borders.
Roxanne Baumann of Baumann Global LLC told listeners at the Wisconsin Tech Summit it would be a mistake to not consider a “strategic” versus accidental approach to marketing goods, services and other products abroad. Among other experiences, Bauman was an international manager for Harley-Davidson and led the creation of Wisconsin’s ExportTech program.
“I can assure you,” Baumann said, “your competitors have a plan.”
Metrics help to explain her point. Trade supports about 41 million jobs in the United States, or roughly one in five private-sector jobs. About 690,000 of those jobs are in Wisconsin, which exported $37 billion in goods and services in 2023 alone. Eighty-five percent of the world’s purchasing power lies outside the United States, 80% of the economic growth is outside the United States and 95% of global consumers live outside the United States.
“Are you going to bet your business on the 5% of consumers who live here in the United States?” Baumann asked.
She noted that a wide range of Wisconsin business sectors export goods and services, including machinery, computing and electronic products, transportation equipment, chemicals, travel services and food-related products. While larger businesses are much in that mix, she said, small and mid-sized businesses account for more than 90%.
For businesses that are earlier in their development, exports can increase revenue and profitability, diversify markets, extend product life cycles and generally lead to faster growth.
Because it’s a big world, businesses can selectively target nation-to-nation markets; tap into help from export credit agencies; avoid risks by protecting trademarks and other intellectual property; and negotiate favorable shipping rates.
“If you find it’s unacceptable to do business in one of the world’s 195 countries, you can find another country,” Baumann said.
She was joined in the presentation by Dennis Lei, counsel general for Taiwan’s office in Chicago, who reinforced the notion that most nations — his included — welcome opportunities to do business in the United States while also buying products made here.
The current climate surrounding trade is confusing to many, because the same White House that can sound free-market on some issues is protectionist on others.
As Baumann noted, “protectionism is not a good long-term idea” and “tariffs are taxes.” However, she acknowledged tariffs can serve as a negotiating tactic to address issues such as border security, drug trafficking, trade imbalances or simply leveling the field with tariffs charged by other nations.
Some of that is small comfort to people who hope current trade uncertainties pass sooner than not. In the meantime, however, small and mid-sized business owners and managers should think strategically about foreign markets. It’s not for everyone, but being intentional is a lot better than being accidental.
