Global issues cannot be ignored

I have been getting a primer on tariffs. The impact of the various tariff tactics on global commerce is important for all of us to understand. There is the looming potential impact on the price we pay for items in the crossfire, and some economists are calling for caution.

The news about tariffs has prompted me to pay additional attention to other global economic challenges. We cannot expect the news sources to cover all of the important global business issues with the same “airtime.” However, let me bring to your attention two stories that caught my attention for similar reasons involving current tariff tiff — economic advancement for the United States.

Last week it was reported that a commercial ship was sailing through the Arctic Circle without the assistance of an ice breaker. This news is significant for a number of reasons.

From a commercial shipping standpoint the thawing of the Arctic Circle opens new shipping lanes to greatly reduce the time to market for those countries with Arctic boundaries. Faster time to market means lower transportation costs and could mean new economic development.

The reduction in the ice shelf in the Arctic Circle means that the ice cap is melting. We can disagree as to the causes of the melting, but the actuality of diminished levels of ice allowing previously impassible areas to now be passed establishes a fact.

As for the economic advancement of the United States, this in my opinion is a cautionary tale. A quick look at the planned shipping routes indicates it is clear that a significant natural advantage is available to Russia and Canada. Our footprint into the Arctic Circle, offered by Alaska, pales when compared with that of our friends to the north and Russia.

The second global commerce concept had escaped my attention, I’m sorry to say, for the past few years.

It is the major initiative by China, proposed by Xi Jinping in a speech in October 2013. In his speech to the Indonesian Parliament, he described a new, 21st century version of the ancient silk trade route.

The two major initiatives — the Maritime Silk Road initiative and the Silk Road Economic Belt — are a combination of ports, maritime routes, railways and roadways from China to markets in Russia, India, Africa and Europe. Australia, Indonesia and other nations in the South Pacific have agreed in principle to participate in the initiative.

If this global initiative is not on your radar, you might want to conduct a brief search to familiarize yourself with the concept and the opportunity. Some of the quick takeaways are that the infrastructure projects, in total, could exceed a trillion dollars. The number of workers from all countries involved and companies that participate could be an economic driver for decades. Part of the strategy is an agreement between Russia and China to offer China access to the previously mentioned North Pole shipping routes. The United States and South America are not, to my understanding, a part of the initiatives.

Natural competitive advantage has always been a factor of economics. Global economics, trade, tariffs and strategy impact the future of all parties. From a strategy standpoint, on its face, China’s Silk Road Initiatives are a master stroke. Cornell Wright is an author, trainer, consultant and an Executive Coach at The Parker Wright Group Inc. in Stratford. The firm assists clients to increase their market share by improved customer service. He can be reached at 203-377-4226 or cornell@ parkerwrightgroup.com.