A new study released today by the Sandpiper Group (Sandpiper), independent reputation and policy management group headquartered in Asia Pacific, and operating across the Middle East, finds that the US faces more blame and is losing more reputation in the global trade war than China.
Based on a survey of 3,050 business leaders in 27 markets conducted this month, three quarters believe that a fundamental cause of the trade and tariff conflict is the policies of the current US administration.
China Soft Power Grows as US Takes a Hit
Based on the views of business leaders on the role of the US and China in the trade war, China is faring better in every area.
70 per cent of global business leaders believe that the US’ unfair trade policies are a fundamental cause, compared with 61 per cent believing the same for China. As a result, 72 per cent think the US should make the first move to de-escalate the trade and tariff conflict, compared with 61 per cent feeling China should do so.
Reputationally, the US is the worst hit with 70 per cent saying the conflict will reduce its standing in the world, compared with 60 per cent for China.
Political Pressure from Everywhere as a New World Order Establishes
With nearly three quarters of leaders (72 per cent) viewing the US’ trade policy as now erratic and unpredictable, most (67 per cent) believe that the conflict will result in a new global economic and trade order, with no market clearly leading it.
While, maybe optimistically, 66 per cent of leaders forecast that the trade and tariff conflict will be resolved within six months, 71 per cent also believe higher tariffs are likely to be a feature of the global economic order for the foreseeable future.
Amid this change, business leaders are feeling political pressure from everywhere, saying political pressure is greater now than six months ago on their business from the US (75 per cent); China (64 per cent); European Union (59 per cent); and other governments (63 per cent).
The Effects Felt by Business Leaders Worldwide
In this unpredictable landscape, 77 per cent of leaders say that the trade war is one of their top business concerns right now. 43 per cent rate the level of risk to their business of this trade dispute as 8 or more out of 10, and more than half expect these risks to rise over the next 6, 12 and 24 months.
As a result, during the current 90-day pause, key actions businesses plan to take include decreasing investment exposure to the US (44 per cent) and China (36 per cent); and 35 per cent plan to halt all major business decisions.
The markets where the highest number of local business leaders feel the trade and tariff conflict poses a major threat to their domestic economies are Vietnam (91 per cent); Philippines (84 per cent); Canada (83 per cent); Malaysia (83 per cent); Singapore (82 per cent); South Africa (81 per cent); UAE (80 per cent); Indonesia (80 per cent); Hong Kong (80 per cent). This is directly reflected in how many feel the tariff and trade war poses a major threat to future prospects for their local business.
Looking at the future, close to two-thirds (64 per cent) believe that their company’s revenue will decrease over the coming year owing to the trade war. 56 per cent believe the US economy will be “heavily impacted”, the worst affected of all countries.
Most Businesses Lacking in Preparedness to Navigate Geopolitical Risk
Possibly owing to the prevailing view that the trade and tariff conflict may be resolved within the next six months, business preparations to manage geopolitical turbulence are not well progressed. Only 21 per cent of businesses globally feel very well prepared to deal with the current geopolitical turbulence.
Although there is a clear sense of the tools required, more than a third of global business leaders are not highly confident that they have these tools to hand. They include:
- A geopolitical risk assessment framework
- Realistic scenario plans to deal with crises
- Close monitoring of political developments that can forecast likely policy changes
- Strong relationships with key policy makers and robust alliances
- A strategy to align corporate messages with national government priorities
“It is worrying that so many global business leaders are reeling from the recent geopolitical upheavals, and that they fear significant increased risks to their businesses in the short-, medium- and long-term, Commented Simon Buckby, managing director of Sandpiper Government and public affairs.
“It is even more shocking that so many admit they do not feel highly confident they have the tools in place to manage their way through. This is a huge challenge for leaders, and especially corporate affairs teams, to step up and protect their firms.”
