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Tariffs & Trade Wars: Should Your Bank Client Worry?

Posted August 02, 2018 by Nicolle Bouffard

A hot topic in the news lately has been tariffs and the resulting “trade wars” they can create. In March, the Trump administration announced that as of July 6, tariffs of 25 percent would be levied on imported steel and 10 percent on imported aluminum. 

If you have business banking clients who are concerned about how these new tariffs and the threat of a trade war might impact their business, Vertical IQ can help you offer them some proactive guidance.

Here are the top three sections of each Industry Profile that you should review and share with clients who may be experiencing heartburn over these trade and tariff changes.

Main Search box on the homepage

Type “tariff” into the main search box; you’ll find dozens of examples of the latest trends and updates.

Quarterly Update

The Quarterly Update chapter of each Industry Profile will provide you with a recap of the sector’s key happenings — positive and negative — from the most recent quarter of the fiscal calendar. Here is an example of a recent Quarterly Update for Metal Service Centers:

TRADE NEGOTIATIONS CREATE PRICE UNCERTAINTY

The Trump Administration’s proposed tariffs of 25 percent on steel and 10 percent on aluminum are creating uncertainty at metal service centers. Many industry experts contend that the broad-based tariffs are needed to address what some are calling a historic volume of unfairly traded imports and transshipping actions executed to avoid trade duties. Critics of the tariffs are concerned that the proposal may trigger a trade war that will negatively impact businesses and consumers around the world. Exemptions to the tariffs have been made and extended several times since they were initially proposed.

Risks to Watch Out For

This chapter of the Industry Profile will offer you foresight into challenges that may be on the horizon for each industry. Specifically, check out the “Industry Risks” subsection to see what issues may be of concern to the industry as a whole.

News

Each month, we add timely news articles to each Industry Profile. They cover the latest topics that are impacting the industry and are a great resource to print and share with your clients.

Sort & Target

Not sure which industries may be impacted by the potential trade war? We can help with that too! On the main “Home” page of your bank’s custom Vertical IQ site, there is a useful resource that you may not know about or use: Sort & Target. It can help you see which industries are using the most foreign exchange bank services, which would suggest they may be impacted by import/export tariffs.

Here’s how to use Sort & Target:

  1. Click the “Sort & Target” link in the top navigation menu.
  2. In the left-hand “Create Your Report” menu, under “Choose Report,” select “Bank Product Usage Data.”
  3. Under “Select Bank Product,” choose “International (foreign exchange, import/export letters of credit) (% of firms).”
  4. Click the “Generate Report” button.

Of course, these results may change over time, but when I did this targeted search today, the top three industries listed were Basic Chemical Manufacturers (with 80 percent of firms using international bank services), Iron and Steel Mills (62 percent), and Fabric Mills (56 percent).

Next, I went to the Industry Profile for each of these three industries, looked at their “Risks to Watch Out For” chapter, and lo and behold: Foreign competition and trade were mentioned in every single one!

Must-have information for business owners

Vertical IQ offers benefits beyond educating bankers about how your clients’ and prospects’ industries operate. The information within the Industry Profiles arms you with valuable insights that can actually help you educate your client about the challenges and opportunities impacting their sector — information they likely don’t have the time to seek out themselves.

You may just be able to allay their fears about an industry trend, or on the flip side, you can inform them of a concerning change that may be on the horizon. Either way, you are providing them with valuable wisdom that can help them better manage not only their finances but possibly their company as a whole.

Tags: Industry research, call preparation, business banking, business owner, fitness centers, tariffs, trade war, steel

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