Attention Private Equity and Venture Capitalists: Know the Guidelines for Managing Investment Portfolio Trade Risks

Abstract

In today’s trade policy environment, it seems as if there is a new business risk every day. One day, it is sanctions on Chinese entities for doing business in North Korea; the next day, it is Russian oligarchs’ activities. And then you are hit with four waves of increased import duties on steel, aluminum, and most raw materials and finished products from China. Even if companies aren’t importing on their own, U.S. manufacturers are receiving “the letter” stating that they must pay additional fees on parts and other inputs. Sometimes the affected products simply involve imported packaging or an aluminum can made in America from imported steel. But with so much change and uncertainty, how do you identify and evaluate these and other trade-related risks that may impact your portfolio companies?