US-China trade war causes drop in sales, new YSU survey reveals

One-third of companies in Northeast Ohio have experienced decreases in foreign sales, some as high as 80 percent, as the result of the US-China trade war.

Those are among the results of a recent survey of 52 companies in 10 northeast Ohio counties conducted by the Export Assistance Network at Youngstown State University’s Williamson College of Business Administration.

Mousa Kassis, EAN director, said the survey was launched after EAN noticed a growing concern among business owners and leaders about the ongoing trade dispute.

Among the results:

• 33 percent of companies surveyed report a decrease of 5 to 80 percent in foreign sales.
• 20 percent report cancellation of orders from foreign buyers.
• 20 percent report a decrease in domestic sales of up to 30 percent.
• While companies report increased importing costs of 25 to 70 percent, 80 percent say their foreign buyers have no plans to cancel future orders.
• 15 percent of companies have either cancelled or delayed plans for investment in capital equipment and/or expansion.
• 60 percent believe trade relations with China will never be the same.

“Companies and business planners in general are used to taking calculated risk in growing their business, however; fishing in a murky water and uncertainty lead businesses to pause their plans in the best-case scenario, or cancel them all together in the worst case,” Kassis said.

“Going forward...it will require that economic development agencies and company’s business planners have to work together to embrace for the worst-case scenarios and to find ways on how to mitigate the risk.”

Kassis said EAN is taking several steps in response to the continuing trade dispute, including educational events on techniques available to exporters to mitigate risk (four seminars have been conducted thus far). EAN will also help companies search for new foreign markets and customers through the International Market Support Program, which expands to more than 70 countries. It also will provide an annual grant for international activities. A new application starts October 1st, 2019

EAN is part of the Small Business Development Center at YSU. For more information, contact Kassis at mhkassis@ysu.edu or 330-941-2145.