- Multinational companies are adapting to new trade tensions.
- Multinationals are going multilocal to get closer to consumers.
- Competition is heating up in fast-growing emerging markets.
As a portfolio manager who invests in many large, multinational companies, the most common question I get these days is whether I am worried about the impact of global trade restrictions on these firms. At a time when punishing new tariffs are being threatened and imposed in rapid succession around the world, are these trade-dependent companies the most vulnerable to a brewing trade war?
The answer may surprise you: While I certainly follow these political conflicts, I am not overly concerned about the impact on well-managed multinationals. Simply put, they are the best-positioned companies to navigate an uncertain environment and devise effective solutions. Some of them are starting to do it now, employing nimble, multilocal business strategies that put them closer to consumers and local buying trends. And some of them have been doing it for years, reaping the benefits of a tailored approach to local markets.