Dangers and opportunities both abound, but too few firms are taking action.

Multinational businesses expect trade wars and other geopolitical shocks to cause issues in 2020 – but few are taking steps to protect themselves or capitalise on opportunities, according to a new study by TMF Group, a leading provider of international business administration services.

The firm polled 1,770 decision-makers in international firms across Brazil, the USA, the UK, France, India, Singapore and China, and found that more a third (37%) believe the trade dispute between the US and China will have a negative effect on businesses in their country. A similar proportion (34%) believed Brexit would create a negative impact on businesses in their country, with 32% thinking the same of a potential EU/USA trade war.

Fewer firms, however, are taking action. Just 29% report setting up entities in new countries to mitigate the impact of trade disputes. A mere 1% say they have identified new customer target markets that are less affected by trade disputes – and less than 1% have changed their strategic focus, identifying new target markets that are less affected by Brexit.

Mark Weil, TMF Group’s chief executive officer, said:

The time for firms to watch and see is over. With the UK set to leave the EU on January 31st and geopolitical disputes ongoing, changes in trade, for better or worse, are going to happen. Firms need to get ahead of the opportunities out there. Firms can change their supply chains and seek out new markets for their own goods. We see high growth amongst our clients in markets around the world. And while some of those markets can be complex to operate in, many are reforming and seeking to become easier to do business in.

Other findings from the report included:

• Businesspeople from China were by far most likely to agree that the China/USA trade war could be damaging to their company, with 59% agreeing with this statement. They were followed by businesspeople from Singapore, 38% of whom agreed. Meanwhile, Indian respondents were the most optimistic about the superpowers’ spat, with 43% believing it will be a good thing for business. They were followed by Brazil (42%).
• While China was worried about trade wars, it was hopeful and end was in sight: 54% of Chinese respondents argue that high profile trade disputes would begin to die down in 2020, making China the country most likely to agree with this sentiment, followed by the USA (41%).  The countries least likely to agree with this statement were the UK (26%) followed by France (31%).
• British respondents were most likely to think Brexit would be damaging, with 46% agreeing with this statement. Next most pessimistic was France (39%). But some firms saw opportunity – most of all China (47%), followed by India (37%).
• Chinese respondents were most likely to predict that a trade dispute between the European Union and the USA would damage their business, with 42% agreeing with this statement, followed by 38% of French respondents. Indian businesspeople were most likely to believe such a dispute would be a good thing (42%).

The research was conducted by Censuswide, with a minimum 250 respondents for each of the following markets; UK, USA, Brazil, China, Singapore, India and France. The sample was made up of business decision makers on regulation and compliance within multinational companies.

Media Contacts

TMF Group:
Antoni van Huissteden, Chief Marketing Officer
antoni.van.huissteden@tmf-group.com 
T: +31 6 15 82 10 03