Navigating Trade in Uncertain Times

By Lauren Comander

Recent tariff volatility and international instability have combined with economic nationalism to hurt profit margins and create uncertainty for businesses. In response, say thought and industry leaders affiliated with FIU Business, U.S. companies must rethink their strategy to remain resilient.

Adopt new rules for dealing with China

This is particularly true when dealing with China nowadays, according to new research published in the Journal of World Business by Dan Prud'homme, assistant professor of international business at FIU Business, and Max von Zedtwitz of the Copenhagen Business School. Growing concerns over national security, technological competition and economic dependence have prompted Western authorities to tighten regulations on Chinese companies. But rather than cut ties with China, Western businesses should look for smart ways to adapt, the researchers advise.

As Western policies aimed at the Chinese government harden, executives here must take a flexible, strategic approach rather than a defensive one to understand the risks and opportunities presented by these policies, Prud'homme and von Zedtwitz argue. Rather than viewing the situation as an economic decoupling, executives should analyze whether the policy seeks to exclude Chinese firms from critical sectors, requires companies to localize technology or production in exchange for market access like the TikTok sale demands, or uses tariffs and subsidies to protect domestic industries. Once they determine what the policy aims to accomplish, they should act accordingly.

Executives should diversify supply chains to reduce reliance on Chinese suppliers, but should also invest locally and partner with innovative Chinese firms that are adapting to Western rules. They should take advantage of government subsidies and support, and increase domestic investment to stay competitive. They also should lobby for a unified Western approach.

Plan for tariffs, embrace flexibility

During these times of volatility and instability squeezing profit margins, global logistics companies are looking for ports in the storm to help clients navigate uncharted waters. Tariff planning, cash flow management and logistics flexibility float to the top as key strategies.

Sean Gazitua (BBA '04), president and CEO of Miami-based global logistics company WTDC, is turning to Foreign-Trade Zones to help his clients defer or eliminate duties and taxes on imported goods that are eventually exported. For goods that will end up in the U.S., Gazitua is prepositioning the inventory in Foreign-Trade Zones until the products are sold, shortening delivery times and improving cash flow.

 
 

"We have received so many calls from businesses, it's out of control," said Gazitua, whose company operates a Foreign- Trade Zone and serves as a licensed U.S. customs broker. "Importers are concerned and nervous, and you have to speak to each one carefully and calmly. At the end of the day, businesses run on margins, and they have to identify solutions to maintain their price and still make money."

"Entrepreneurs see difficult times as opportunities."

– Sean Gazitua

Companies are using this period of volatility to build stronger partnerships, with some businesses spreading tariff costs between manufacturers, importers and distributors as a short-term solution. "Entrepreneurs see difficult times as opportunities," Gazitua said. "You can't fold. You have to work with your partners to figure these things out, and this is why it's important to have strong relationships."

Rethink old ideas

As founder of Roebling Innovation & Consulting, Alessandra Szul (MSLSCM '25) helps toy, beauty and wellness companies bring their goods to market, and because of the current global trade environment, she is helping brands rethink how they launch products. What is up for discussion? "Decoupling manufacturing from regional fulfillment, modeling around consumer confidence dips and figuring out how to make global work without losing margin," said Szul, who as a fractional COO for numerous brands is immersed in supply chain, direct to consumer launches and market strategy. "Companies, especially smaller ones, need to stop treating trade like background noise."

Szul models scenarios with her clients before they decide what to launch where. "Sometimes the margins just don't work once you factor in duties or volatility," she said. "Between tariffs, instability and shipping spikes, this stuff affects every part of the business now. A lot of people still treat ‘global trade' like a finance department problem. It's also product, marketing, pricing, demand planning, all of it. Operators need to be scenario thinkers now."

Consumer behavior is shifting. "Buyers are nervous," she said. "People are more values-driven, more price-sensitive, and more focused on local or regional products."

Four key points Szul finds herself repeatedly telling clients:

• Your customs broker is your best friend.
• Don't single-source your manufacturing.
• Before launching anything, ask: What happens if shipping doubles? If duties spike? If a country bans exports? Have an answer to each question.
• If you're small, launch where infrastructure and buying power are strongest. Start with urban direct-to-consumer and expand from there.