Russian Gas Threatening European Economy as War in Ukraine Rages On
The Russian oil monopoly, Gazprom, has made the move to suspend natural gas services to Poland, and Bulgaria as of April 27th, and with the U.S. sending military weapons and troops, Russia’s capacity for further retaliation could result in unfortunate outcomes that could ripple throughout Europe with outcomes that could affect the global economy. So, what can we expect as business owners in the United States, and how can we navigate the changes to come?
The Euro is now valued at below $1.06 which hasn’t occurred in over five years as a result of fears of an energy crisis in Europe which could result in an economic slowing with rippling effects. This strain is forcing high energy costs on European companies which in turn will inevitably affect imports from Europe and the companies buying them as prices soar to accommodate energy costs.
What could this mean for business owners enmeshed in globalization? If you’re importing from Europe or doing business with anyone in the EU, expect higher trade prices as European companies are attempting to offset the cost of rising energy, especially if Russia puts embargos on their oil. The UN is currently working on suspending Russia’s membership in the Human Rights Council which could result in Russia reacting with more and more retaliation against neighboring countries. Those retaliations include costly embargos against countries that dare to defy their actions in Ukraine. As the changes occur, prices change, and alliances are tested there are a few ways you can protect your business:
Form and strengthen local partnerships - It’s important to have reliable trade routes and finding local distributors and partnerships whose supply chains rely on local relationships will limit some of your company’s risk as Russia’s energy conflict affects European business interests
Begin setting aside finances to adjust for the coming recession - Though allocating funds to potential recession-related costs can be complicated, it’s important to know exactly how you’ll cover the costs of inflation
Be prepared for trade partners to be affected by the energy inflation in Europe - Even if you’re personally prepared, your trade partners may not be which could, in turn, hurt your bottom line. For those partnerships, you can’t replace, be sure to be ready for inflated costs
Consider currency trading - If possible, take advantage of the lowered price of the Euro and work with a qualified trader to broker on the FOREX market
Look into creative ways to offset the cost of rising European goods by offering discounts on products or services that don’t utilize European resources, or have an overall sale now to boost sales and provide some much-needed respite to your customers
Consider alternatives - As with the wheat shortage, consider alternative sources of supply. Who knows, you may attract a new breed of customer in the process
Network - Find local groups or organizations geared toward supporting small business owners. You may find new partnerships and alliances that could be strategically beneficial.
Open a new stream of commerce - Monetize your Trademarks, and create and sell a digital product tailored for your audience. It may require a little creativity, but it could boost your sales
Build your e-mail list - Strengthen your marketing schema and ensure that none of your connections are not being retained. Build a strong email list with an attractive freebie.
Eliminate liabilities - Any unnecessary expenses, and any hazards or issues should be dealt with. The last thing your business needs is a lawsuit or liability
As this war develops expect for things to continue to change, and for many of those changes to affect you as a business owner - first. TEIL Firms is carefully following all business changes that can be expected in the current news, especially as it pertains to the war in Ukraine.
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Source: https://www.nytimes.com/2022/04/27/business/russian-gas-european-economy.html