Impact of the US-China trade dispute on global manufacturing and business diplomacy

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Satyendra Upadhyay & Sanika Ranadive
Conference Name
Conference of the EuroMed Academy of Business 2020
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K J Somaiya Institute of Management, Mumba, India
  • Abstract

Globalization and internationalization in the economic world has led to firms growing their reach to other countries. While low production costs and access to new markets is an essential factor, Government regulations and incentives make the process of doing business in foreign countries easier. Firms also need to make an effort to adhere to the domestic labour laws, human rights and deal with any financial instabilities in those markets. Firms adopt their own strategies and practices to deal with such situations along with geopolitical, national or international crises. This brings in the concept of business diplomacy to structure the firm’s geopolitical environment and minimize or avert risks from geopolitical or economic crises on the international front to ensure the operation of the firm in concomitance not only in that particular country but across its several locations in the world (Ruël, 2015) . The importance of business diplomacy therefore is a consequence of keeping up with political and economic changes, several stakeholders in the process, nature of markets, institutions, and environment standards. Business diplomacy has been defined as ‘the management of interfaces between the global company and its multiple non-business counterparts (such as NGOs, governments, political parties, media and other representatives of civil societies) and external constituencies’ (Saner & Yiu, 2005). Government relations and the firm’s global governance are therefore essential in establishing business diplomacy while maintaining business opportunities. The responsibility to establish sustainable positive relationships and reaching out through various channel to the aforementioned government and non-government sectors make for smooth business diplomacy. The ongoing trade dispute between the US and China on tariffs on imports have impacted several US based firms with their manufacturing in China.(BBC, 2019) The leadership from both countries have been adding on tariffs

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