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STATEMENT

Of the Honorable Alma Adams, Vice Ranking Member

Committee on Small Business

Full Committee Hearing

April 11, 2018

Small and medium-sized businesses make up 97 percent of American exporting companies – making exports critical to our nation’s overall economic health.  Not only are small businesses active in the export market, but many of them rely on imported materials to manufacture products and deliver services to consumers.  I am troubled that the President’s recent announcements related to tariffs represent an erratic economic policy that could jeopardize small firms’ participation in the global economy. 

The unpredictable and ad hoc nature of President Trump’s tariff announcements are raising concerns about how these changes – and threats of other changes – might harm entrepreneurs.

Instead of creating a thoughtful plan to address some of harmful effects trade agreements have had on our economy and middle-class, the Trump Administration has launched a retaliatory attack after retaliatory attack that brings our country perilously close to an international trade war. And, it’s necessary to clarify; trade wars are not good and are not easy to win.

Setting aside recent developments, small businesses already face enormous challenges when attempting to enter foreign markets.  These firms often lack the resources to identify opportunities abroad and develop contacts overseas.

Moreover, small business that export products are often unaware that they are at risk for Intellectual Property theft. One study even found that only 15 percent of small businesses that conduct business overseas know that they need to file for IP protection abroad.

Perhaps the most prohibitive factors small companies face in exporting are cost and resources. In fact, nearly half of small-business exporters spend a minimum of a few months preparing to export.  Fully one-third spend over five percent of their annual operating revenue to start exporting.

The federal government operates a range of programs aimed at minimizing these barriers and facilitating small firms’ entry into world markets.  The State Trade and Export Promotion Grant Program, administered by SBA, partners with state government organizations to help small companies access tools they need to begin exporting. 

It is important that initiatives like these operate as efficiently as possible to promote small business growth.   To that end, I look forward to hearing from today’s witnesses about how programs like these are meeting the needs of entrepreneurs -- and what improvements can be made either by the agency or by Congress to better serve small firms. 

While ensuring the smooth functioning of export promotion initiatives must be a priority for this Committee, it is equally important that we have an open, frank discussion about how the Administration’s recent tariff announcements are impacting global markets and American small business.  Rapid, ill-conceived changes to trade agreements could result in small business supply-chain disruptions, price increases and costs shifted to consumers. Equally important, is the President’s economic rhetoric and saber rattling.  Trade wars initiated by Tweet certainly cannot be beneficial to small firms – whether they rely on imports for products made domestically -- or if they are hoping to expand their international footprint. 

While our Committee should rightfully focus on ensuring SBA trade-oriented programs are functioning well, I also hope today’s discussion takes a meaningful look at what the Administration’s broader trade actions mean for small businesses. 

In that regard, I would like to thank our witnesses in advance for their testimony.  I look forward to hearing their perspective on these timely issues.