Talking Trade

In the latest episode of “Talking Trade,” international trade consultant Chris Wojtowicz discusses supply chain disruptions and potential solutions. 

Wojtowicz is part of the Small Business Development Center at the UW Institute for Business and Entrepreneurship and is the chair of the Wisconsin District Export Council. He highlights the support available for companies looking to connect with domestic and international markets. 

He also touches on some of the top challenges facing small businesses amid the pandemic recovery. 

“A lot of them are a little skittish, some of them are just straight-up gung-ho, let’s get after this. Which is great, I love that particular energy,” he said.

In the latest episode of “Talking Trade,” Michael Best Strategies Principal Mike Dankler provides an update on the latest sanctions against Russia and the effect on trade and commodity prices. 

“One area where the U.S. and EU and others haven’t really gone the full way is on energy,” he explained. “EU is just so reliant on Russian oil and gas that they can’t go too far yet without hurting themselves.” 

Dankler said it’s uncertain how long it will take for certain sanctions on Russia to have a real impact on the war in Ukraine. He noted long-term export controls are expected to impact Russian factories, while banking sanctions recently announced by the United States “make a default almost imminent.” 

“How does that impact Russia’s ability to prosecute its war? That’s kind of the main question,” he said. “And the secondary question of, what does Vladimir Putin consider a win?” 

He also points to “wide-ranging” impacts on global supply chains, though he noted Russia isn’t as interconnected with western supply chains as a country like China, for example. But because both Ukraine and Russia are major producers of wheat, he warned of potential famines or food supply shortages. 

“We haven’t seen that yet but it’s definitely a concern,” he said.

In the latest episode of “Talking Trade,” Visthar founder Pradeep Nedungadi highlights trade opportunities for Wisconsin companies in India. 

His company provides consultant services for businesses looking to operate in India, which is the second most populous country in the world. 

“It’s a shame that the U.S. is just discovering India as a manufacturing option, and even as a trading partner in non-manufacturing businesses, only in the last 30 years,” he said.

Unlike China, he explains India has been historically focused on domestically consumed goods rather than export products. 

“Now that the global automotive industry has entered India in the last 30 years, with largely Japanese companies but some U.S. companies and European companies, everything that follows automotive is also developed to world-class standards,” he said. “So now it is available to the Western world for products, parts and components. So the landscape is looking good.” 

Many of Visthar’s clients are located in the Midwest, including Wisconsin, Illinois and Iowa. The company’s business has doubled in the past two years, and Nedungadi says he expects another doubling between 2021 and 2022. 

“It’s from a smaller base, but as the base grows higher, we’re still maintaining that growth,” he said. “We’re expecting it to triple from 2022 to 2025.” 

In the latest episode of “Talking Trade,” a UW-Madison economist and expert on Russia provides insight into the evolving conflict with Ukraine. 

Paul Castaneda Dower is an assistant professor of agricultural and applied economics at the university and is involved with UW-Madison’s Wisconsin Russia Project. He offers his perspective on the rationale behind Russia’s invasion of Ukraine as well as how it could impact global trade. 

“Precisely because Ukraine is so close to Russia … economically, culturally, historically, politically, all these things, because they’re so close, if Ukraine is able to successfully integrate with the west and democratize in a successful way, this means that it can be done in Russia too,” he said. “That’s very problematic for Putin’s worldview.” 

Aside from the predicted rise in fuel costs, Dower notes Russia and Ukraine combined produce a fourth of the world’s wheat and a fifth of the world’s corn. And Ukraine is the world’s largest exporter of sunflower seed oil. 

“So obviously this is going to have huge effects across the globe,” he said. “With the pandemic’s disruption of the global supply chains, this is going to be an additional, kind of perfect storm if you will, to impact global prices.” 

The latest episode of “Talking Trade” features a conversation with Samantha Vortherms, an assistant professor of political science at University of California, Irvine. 

Vortherms, a 2017 graduate of UW-Madison, discusses trade relations between the United States and China with hosts M.E. Dey & Co. President Sandi Siegel and UW-Madison Professor Ian Coxhead. She highlights recent research on how trade wars impact multinational firms operating in China. 

“Tariffs do increase exits, but really it’s this broad political souring that’s pushing firms out,” she said. “And not just U.S. firms, but firms much more broadly.” 

She found that large firms, and those that entered China about 20 years ago, were the least likely to leave the country amid the “souring” environment. Companies that are more entrenched in China with a stronger base of operations were “much less likely” to leave than other businesses. 

“We really think that firm size, so how much capital they have, and their age — how long they’ve been there — are proxies for how well integrated they are, maybe the relationships that they develop locally that can kind of buffer,” she said. “Instead of shutting down to reduce costs, they then pass on the costs to consumers or somewhere else down the supply chain.” 

The featured guest on the latest episode of “Talking Trade” is Mark Rhoda-Reis, director of the International Agribusiness Center at the Department of Agriculture, Trade and Consumer Protection. 

Rhoda-Reis gives an update on “quite a strong year” for ag products in the state. Based on year-to-date data from November, he said exports over most of 2021 were up 19 percent over the previous year. 

For the overall year, he said “we expect to be up close to that percentage amount; that’ll put us at least our 10-year record for agricultural exports.” He noted the state’s top five export markets saw growth through November, with three of those experiencing growth in the double digits. 

“We’re a little bit surprised, if you think about the high cost of containers, the lack of availability of containers, workforce shortages and challenges and being able to produce, but there was so much pent-up demand that we sort of were able to overcome a lot of those headwinds,” he said. 

The latest episode of “Talking Trade” features Rocío Rivera Barradas, consul of economic affairs at the General Consulate of Mexico in Chicago. 

Barradas highlights difficulties with trading with China and other Asian nations due in part to COVID-19 factors. She notes the auto industry has been struggling amid the pandemic, contrasting that with the success of the medical industry and strong Mexican beer sales in Illinois. 

Also due to the pandemic and challenges related to trading with China, Barradas says U.S. companies “are looking again to Mexico” to relocate some of their operations. 

“Here at the consulate, we receive many questions and requests about finding suppliers in Mexico. Also finding companies that can’t manufacture products that they used to buy from China — now they want to buy it from Mexico,” she said.

In the latest episode of “Talking Trade,” WEDC Vice President of Global Business Development Katy Sinnott highlights rising exports to some of the state’s top trade partners.

Wisconsin’s exports over the past 10 months have increased 21 percent compared to the same period of 2020, with growth seen in exports to Canada, Mexico and China, she said.

She noted pharmaceuticals and prepared vegetables shipped to Mexico have “increased by huge numbers,” while exports of medical and scientific equipment to China have also risen.

“And when we look at our top three export products, which are industrial machinery, medical and scientific instruments, and electrical machinery, all of these categories have increased by between 6 and 10 percent, so good news,” she said.

Sinnott also discusses programs run by the Wisconsin Economic Development Corp. that aim to help businesses boost exports, as well as the agency’s network of trade representatives.

“We’ve had people who have had laws change while their product is on the water, going to a country, and we’ve actually been able to use our trade representative network to find support for that company so when it landed in that country, they actually could offload their equipment and send it to their buyer,” she said.

The latest “Talking Trade” video podcast features a conversation with Will Hsu, president of Hsu’s Ginseng Enterprises. 

President Trump’s trade war with China and COVID-19 were doubly harsh on Wisconsin’s ginseng trade, as Talking Trade hosts Ian Coxhead and Sandi Siegel learn from Hsu.

The latest “Talking Trade” video podcast features Mike Dankler, trade advisor for Michael Best Strategies in Washington, D. C.

With a new trade agreement reached between the United States and the European Union, Talking Trade hosts Ian Coxhead and Sandi Siegel discuss future trade and tariff issues with Dankler.