Small businesses in the U.S. overwhelmingly see global trade as vital to advancing the economy, while most also said the tariffs imposed by the Trump administration have had a negative effect in their companies.
In the fifth annual FedEx Trade Index, a survey of more than 1,000 small business leaders that tracks the impact of international trade in the small business segment of the U.S. economy, 82 percent of respondents saw increasing U.S. trade as beneficial to the overall economy and 75 percent said selling goods online to international customers is important to the growth of their business.
When asked in the survey about the impact of fees and tariffs on business growth, 80 percent said there has been “some degree of impact.” That broke down to 35 percent saying fees and tariffs have negatively impacted the growth of their business “a great deal” and 45 percent saying they have had “some” impact.
“FedEx knows that simplifying and expanding global trade is essential to our customers’ success,” Brie Carere executive vice president and chief marketing and communications officer at FedEx Corp., said. “The results of the latest FedEx Trade Index confirm the negative impact of tariffs on small business growth. We believe everyone benefits when it’s easier to bring new ideas and products to the global market. Breaking down trade barriers is essential to creating new opportunities for our small business customers.”
Additional key findings from the survey were that 74 percent of businesses said expanding opportunities between the U.S. and customers in other countries will increase job growth in the U.S., while 84 percent said they supported the U.S.-Mexico-Canada-Agreement (USMCA), which is pending Congressional approval. Another 56 percent think increasing trade between their country and other countries will help their company.
Commenting on the October 2019 National Association of Business Economists (NABE) “Business Conditions Survey,” NABE president Constance Hunter, who is also chief economist at KPMG, said, “After more than a year since the U.S. first imposed new tariffs on its trading partners, higher tariffs are disrupting business conditions, especially in the goods-producing sector. Two-thirds of respondents from that sector indicate that tariffs have had negative impacts on business conditions at their firms.”
The NABE survey noted that nearly one-third (32 percent) of respondents reported no impact–in general or on net–at their firms from recent tariffs. However, those citing net negative impacts increased to 35 percent in October from 28 percent in July.
The negative impacts remain concentrated among goods-producing firms. The most common impacts were higher costs, cited by 30 percent of respondents, and negative impacts to sales, cited by 19 percent.
As for e-commerce, the FedEx survey found 48 percent of small businesses said selling goods online is important to their business and 44 percent said they are already doing so. Seventy-five percent of respondents reported that selling goods online internationally was important to the growth of their businesses.