World Trade Problems

War, conflict, economic sanctions, extreme weather and global pandemics can all affect international trade. However, the overall impact on international sales can take time to determine.

Barriers to trade, like economic sanctions, can effectively stop the sale of goods and services to a particular area. Extreme weather and global health crises can halt shipments and create supply chain catastrophes.

In 2020, West Virginia experienced a 23% decrease in the international sale of goods in export statistics tracked by the U.S. Census. However, exports the following year rebounded, with export sales totaling $6.3 billion, placing the state third in the nation for growth. According to export statistics from the third quarter in 2022, the Mountain State continues to grow export opportunities. The ability  to quantify the impact of external political events on West Virginia exports is limited by the data available and the anecdotal retellings from small business exporters. The bigger question lies in what small businesses can do to manage the impact of those situations that, ultimately, they have little control over.

Losses that occur from global events beyond the control of an individual company can be mitigated in other ways. For example, economic sanctions on a country may halt the sale of a particular item, but new markets for that item may emerge.

Following trade restrictions on Russia in 2022, exports have sometimes slowed and halted. West Virginia product exporters with customers in the energy sector in Russia have experienced delays in shipments and the additional requirement of checking the growing list of embargoed products to ensure they comply with U.S. customs regulations. While this additional due diligence adds time to the daily paperwork, it is a requirement and part of the cost of doing business internationally. Meanwhile, these exporters have looked to expand into new markets using similar technology. This diversification allows the small business to ride out political conflict and limit the overall effects on the business.

The U.S. Commercial Service, the federal agency responsible for promoting U.S. exports, has received trade leads for coal shipments to countries like Poland. As the war between Russia and Ukraine continues, the energy needs of Europe remain, despite the European Union’s embargo on Russian coal.

As of quarter three in 2022 , West Virginia’s coal exports increased by 55% over the previous year. Notably, in 2021, the Netherlands was West Virginia’s fifth largest coal export market. In the third quarter of 2022, it was third, with an increase of more than 500%. Japan also banned Russian coal imports, and West Virginia’s coal exports to Japan increased 109% by the third quarter in 2022. Overall, coal exports across all U.S. states were up 111% in 2022.

Following the catastrophic events of the COVID-19 pandemic, West Virginia exporters—and the world—have had to adapt to an ever-changing business landscape. A quick adoption of virtual meeting technology allowed many to continue communicating with customers and assuage concerns. Companies also brought more manufacturing in-house, when applicable, to avoid long wait times for parts and critical components. A general acceptance of longer wait times has also permeated the international business community. In specific industries, like building products, the increase in demand during the pandemic remained unchanged moving into 2022. As 2022 concluded, third quarter statistics showed a 6% increase in West Virginia’s non-coal exports from the same period in 2021.

So how can West Virginia exporters unfamiliar with the ever-changing political and economic climate adjust when necessary to prevent significant disruptions within their companies? First, exports are not and should not be an afterthought in business; exports are sales. They require planning and commitment, like a company’s domestic sales. Companies with the most substantial export sales are the ones that plan and strategize. Identifying new markets for entry and expansion is the first step to protecting the business from outside influences beyond the control of company leadership.

Second, companies must consider a robust export compliance plan. When strategizing where to export, ensuring compliance with federal laws and identifying the steps needed to protect the business will significantly safeguard the company and mitigate losses. Finally, while prioritizing exports is important, small businesses often need more financial resources or the workforce to take full advantage of international opportunities. This is where leveraging the resources available to small businesses can create growth opportunities. Both federal and state governments work in partnership to support West Virginia companies and make global markets accessible to all companies.

Regardless of the external disruptors experienced by West Virginia exporters, one thing has remained constant: West Virginia’s thriving small business exporters have been proactive in addressing the problems and relentless in finding alternative solutions. Exports are vital to West Virginia’s economy and should continue to be celebrated and championed as an integral part of every company’s business strategy.