The world is currently undergoing significant realignment and powershifts, driven by mounting pressures such as Conflict, Fuel Prices, Economic Pressure, Supply Chain Issues, and Tariffs. While news headlines often amplify fear, savvy international traders are preparing now to avoid struggling later. For small businesses, particularly those engaged in international commerce, understanding these global shifts and adapting quickly is vital.
Geopolitical Pressures: Venezuela and China
The Venezuela Flashpoint
Tensions are escalating in South America following the US backing of Guyana in its territorial dispute with Venezuela over the Essequibo region. Guyana has become the third-largest oil producer in South America due to the discovery of 11 billion barrels of offshore oil, which has reignited Venezuela’s claims. The U.S. has deployed military assets and conducted joint drills as a deterrent.
If these tensions escalate into conflict, the ripple effects could directly impact U.S. small businesses. Potential consequences include disruptions to over 500,000 barrels per day of Venezuelan oil, leading to spiking global energy prices and tightened supply chains. Additionally, shipping lanes in the Caribbean could face lockdowns, insurance costs may soar, and regional trade with Latin America could be hit by delays and retaliatory tariffs.
Action is critical: Businesses in logistics, energy, or import/export should monitor geopolitical advisories and consider hedging strategies. As one CEO advised, “When big countries fight, small economies feel it first.”
China, Tariffs, and Fragmented Trade
Trade tensions have intensified following China’s record $1 trillion trade surplus in 2025, fueled by massive exports of EVs, machinery, and semiconductors. In response to concerns over overcapacity and “dumping” in sectors like clean tech and electronics, the US and EU have raised tariffs as high as 145%.
For small importers, this fallout is already manifesting as steep, unplanned customs costs, leading many businesses to delay shipments, cut orders, or raise prices. As reshoring is often not a viable fix—given that US manufacturers often charge three to four times more while still relying on Chinese inputs—businesses must plan for lasting geopolitical friction.
In this environment, supply chains are rapidly shifting, with over 70% of EU firms in China reporting growing operational challenges and accelerating moves to Southeast Asia and Mexico. Small businesses must diversify suppliers, map deeper-tier dependencies, and prepare for increased regulatory scrutiny and compliance burdens.
The Defense Opportunity in Europe
The transatlantic relationship is changing, with the European Union recognizing that it cannot rely solely on US protection. This shift has triggered unprecedented defense spending in Europe. Germany alone has allocated an additional €1 trillion for defense, supplementing roughly $870 billion in proposed EU defense spending.
While the funds are now available, the required capabilities are not. This gap creates a tremendous opportunity for US-based companies, including Wisconsin manufacturers such as Oshkosh Defense and smaller component suppliers across the state.
This global political volatility is also reshaping supply chain strategies. Companies are moving away from “just-in-time” manufacturing toward a “just-in-case” approach, stocking more inventory to ensure resilience. Although the defense industry has traditionally been stable, today there is far more room for new players.
Surviving Domestic Volatility: Government Shutdowns
Government shutdowns create uncertainty, especially for businesses dependent on federal services or contracts, but they also present opportunities for prepared businesses.
Here are key strategies to not only survive but thrive during a potential shutdown:
- Review Your Federal Contracts: Proactively examine contracts for clauses like “stop-work” or “funding availability.” Communicate with contracting officers to manage risk and prepare for delays.
- Build Cash Resilience: Since payments can be delayed, prioritize essential expenses in a short-term budget to preserve reserves.
- Diversify Your Revenue Streams: Expand your customer base by targeting local or private-sector clients, especially since businesses heavily dependent on federal work are most vulnerable.
- Secure Alternative Funding: Because SBA loans and guarantees may pause during a shutdown, explore alternatives like bank term loans, lines of credit, or invoice factoring.
- Strengthen Operational Resilience: File permits, licenses, and regulatory approvals early, and invest in cloud-based tools to keep operations running smoothly.
Clear communication with employees, suppliers, and clients about potential delays is essential, as it builds trust and can lead to creative solutions.
The Clear Message: Plan and Adapt
Across all these global and domestic challenges—from escalating military tensions to trade fragmentation and shutdowns—the message for small business is clear: plan for the worst but prepare to adapt. By strengthening resilience, diversifying revenue, and planning ahead, businesses can turn uncertainty into opportunity and emerge stronger and more competitive.
The Go Global Initiative is here to help companies mitigate these risks in international trade.
