2020 has been a unique year, unlike any other, we have experienced in living memory. The last comparable incident would be the Spanish Flu of 1918, and since any survivor of that pandemic would only have been a child at the time we are in unchartered waters. The one positive thing is that our trade and logistics abilities have been relatively unaffected as international trade is the backbone of our economies.
International Trading in 2021
There have been some challenges, and more challenges are certain to come. With the world being smaller in terms of trade than it ever has been, many small businesses are buying and selling goods and services across international borders. So, let’s look at what to expect in the world of international trading in 2021.
Brexit: Britain & the EU
It’s fair to say one of the biggest stories of the political and business world over the last few years has been the protracted process that has been the United Kingdom’s exit from the European Union. It seems like much longer than four years that the referendum vote happened, especially if you live in the affected area. There is good news here if you are trading between areas. A trade deal was concluded at the 11th hour.
Trade will largely remain tariff-free, although there will be significantly more paperwork to complete, and transport times will increase. The one main difference, which has already been in the exchange rate between GBP and the EURO.
Over the last few years, the pound has fallen significantly in value, meaning bad news for those importing into the UK. Although this has been better news for those exporting from the EU. One to keep an eye on.
Payments & Financial Investments
As always, how to transfer funds around the globe is an important decision for a small business. Especially if the amounts are significant. Even a small change in the percentage charged can make a massive difference to your profit margin.
One area that has been increasingly on the rise in recent years is the use of cryptocurrency, which will impact international trading in 2021. There are many good reasons for this, these new currencies are decentralized and not subject to regulation. Since they are autonomous and not connected to any nation or territory, there is no charge depending on how far funds are traveling.
Cryptocurrencies can be difficult to use if you are mining them. However, for trading and sending money, there is no need. It’s simple to set up, and you can easily find out where to buy USDT and get trading quickly.
For your end of year accounts keeping funds tied up in cryptocurrency can be beneficial, as they are not technically considered a legal currency. In the eyes of the courts they are possessions. Therefore, one could argue that it is a current asset rather than realized profit.
Shipping & Transport
We are starting to see significant changes coming in the way goods are transported around the world. The biggest challenge to the shipping and logistics industries is the need to switch to a low-carbon economy.
We are seeing real change in domestic transport to electric vehicles, but is this possible in commercial haulage? It’s going to be a challenge, and there is much work going on in this area.
It may be more realistic in the short term to expect carbon offsetting to achieve something close to carbon-neutral emissions in the air. But how does this affect us as business owners and international trading in 2021? In the short-term, it may mean an increase in shipping costs. There is an upside to embracing green issues. We can use this as positive PR to show potential customers that we are an ethical and considerate company.
Author: This article has been contributed on behalf of Paxful. However, the information provided herein is not and is not intended to be, investment, financial, or other advice.