Emerging from uncertain times

The future of international trade

Commentary from International Trade specialists Darren Rigden and Rob Marchant, partners at Crowe.

To emerge successfully from this period of uncertainty, organisations must look ahead to understand the potential impact of changes to the international trade system.

Trade tension

To consolidate short-term resilience, organisations must consider:

short-term supply chain disruption: from secondary COVID-19 outbreaks and resulting cash flow issues
working capital management: customer payment collection, supplier and employee payment and stock management
non-financial aspects: cross-border rules compliance and obtaining pandemic-related resources (e.g. PPE)
global mobility: overseas recruitment and grappling with lockdown, quarantine and travel restrictions
tariff changes: trade war and Brexit-induced
Local tax developments as governments use temporary tax measures as sources of fiscal stimulus.

To plan for long-term revival, organisations must monitor:

manufacturing, supply chain and transportation complications: local outbreaks/lockdowns, shipping and goods supply, and social distancing lengthening lead times
technological adaption: necessity for continual monitoring and improving of tech capabilities
political pivots: impact of US elections on trade wars and international relations
cash concerns: grappling with the withdrawal of government support schemes
free-trade agreements: FTA progression will impact businesses’ ability to succeed.

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Darren Rigden, Partner at Crowe, said:

"Business needs to keep up-to-date with changes in international trade to assess whether they can enhance and develop pre-existing plans.

"As businesses seek additional funding to finance their operations and increased working capital requirements, forecasting and risk management analysis will speed up and add credibility to funding applications.

"For some, there will be opportunities to merge or acquire businesses at lower prices than pre-COVID, but transactional due diligence will be more vital than ever.”

Rob Marchant, Partner at Crowe, said:

“To kickstart growth, business needs governments across the world to promote global trade and investment. Reducing red tape in relation to tariffs, customs and border controls will all help to keep trade flowing.

"The UK remains one of the most attractive investment destinations. For example, in my experience, the UK brand is still held in high regard around the world. Hopefully, this can be leveraged to the benefit of the UK economy as the UK enters the next phase of its international trading arrangements."

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Organisations must map out a route forward to navigate the current – and coming – social and economic uncertainty that arises from the COVID-19 crisis.

View all our ‘Emerging from uncertain times’ insights.