- A survey of 1,000 small business decision makers for FedEx's Fall 2019 SME Trade Index found 82% believe trade is key to economic growth, particularly when it comes to job creation. Half of respondents said increased trade and global business opportunities would "moderately increase job growth" and 24% said it would "significantly increase job growth."
- The study, prepared and conducted by Morning Consult, found the majority of U.S. companies surveyed had been impacted either "some" (45%) or "a great deal" (35%) by fees and tariffs.
- The majority of respondents also viewed the North American Free Trade Agreement (NAFTA) and the U.S.-Mexico-Canada Agreement (USMCA) positively at 79% and 84% approval respectively.
The percentage of small businesses that support increased global trade has been on the rise since the fall of 2016, when the index was first launched. At the time, 77% of those surveyed saw expanding trade in a positive light. Furthermore, 65% of respondents engaged in trade said their revenue was increasing compared to 46% that did not trade. The firms that were trading were also 20% more likely to report hiring more employees.
Since 2016, according to FedEx's indices, costs and uncertainty from the trade war with China highlighted how access to foreign-made components and U.S. participation in international trade agreements is crucial to the success of small domestic businesses.
"The results of the latest FedEx Trade Index confirm the negative impact of tariffs on small business growth," Brie Carere, executive vice president and chief marketing and communications officer at FedEx Corp, said in a press release. "Breaking down trade barriers is essential to creating new opportunities for our small business customers."
Despite the Trump administration's intention to bring jobs back to the U.S. by levying tariffs on Chinese goods, the result has been reduced investment in innovation and job growth and a significant decline in domestic manufacturing, all without an uptick in U.S. reshoring. While these burdens have been felt by commercial giants like Apple, Boeing and Harley-Davidson, they have more resources to mitigate trade costs and uncertainty than small businesses.
Katie Stack, owner of Stich and Rivet in Washington, D.C, faced a cost and logistics challenge when she was sourcing raw materials for a "Made in America" line of leather bags. She told Retail Dive she eventually found a domestic leather supplier, but her rivets and other hardware are only available affordably in China. Stack said she front-loaded as much inventory as she could ahead of peak season. "Nobody knows what's going to happen. So it's thrown everything into this incredible instability," she said.