Russia’s invasion of Ukraine, energy volatility and the delicate relationship between monetary and fiscal policy have made the US the most attractive destination market for exports in the world. Despite the hikes to control inflation, all indexes of exports and internationalization place the US as the most attractive on a global scale.
The latest Market Prospect Report of the AMEC business association to discover where the opportunities will be for Spanish industrial companies, ranks the United States as the most interesting country in the world for Spanish companies, because of “the size of the market, the flexibility that it always has. It is presented in various crises and comparative advantages that offer Spanish retains many parts of the analysis. It followed the Netherlands as the most accessible market.
Some offer in the US
US economic policy aims to reduce growth without decreasing economic activity. Thus, the increase in demand is moderated, also due to the progressive reduction in savings levels and the end of subsidies in several tax packages. The general director of AMEC, Joan Tristany, notes that “from 2021, the US has led a better order for foreign investment. The resilience that it always shows in the various crises and the comparative advantage that the Spanish offer. Iia in many sectors See, it makes one of the few stable markets. ” In his opinion, the US will continue to occupy the top honors, all the more attentive to the commitment of its industry and the significant investment plans to encourage its implementation.” In the opinion of José Luis Kaiser, head of economy and trade from the ICEX consultant in Washington, he believes that “it is foreseen what the demand will be at the levels before – it would be pandemic and limit its contribution to increased prices, unless new incentives and subsidies are approved”.
Most North American companies that operate globally, driven by federal policies, have thought or are considering the rapaciousness of supply sources and the reduction of value and logistics chains to avoid disruptions in the future; the phenomenon of ‘near sourcing’. This phenomenon will have consequences for prices in the medium and long term, since the establishment of sources of supply of parts and intermediate goods in the United States entails more costs than in the current areas. This fact is confirmed by the provisions of two major policies approved by the Biden Administration: the Infrastructure Investment and Jobs Act-IIJA; and the Inflation Reduction Act (IRA). The aid package is about 338,000 million in cash. As a result of this trend of extraction and general law, the establishment of foreign companies in the US is also an opportunity for foreign investment that wants to establish headquarters. The last company to acknowledge interest in further implementation was the US Railroad. The intention to list on the New York Stock Exchange is more to access the market for large business opportunities and requires a physical presence to capture the growth of these options.
Mango plan
Other firms such as Mango have already announced a port in the US in 2022, first with a flagship store, but also with a logistics plan in line with the expansion that takes place in online sales. The company, the second largest distribution company in Spain, recently announced that it has signed an agreement with real estate giant Brookfield Properties to open seven new stores in shopping centers in the United States. The company will set up shop in Brookfield complexes in Texas, California and Georgia to open new stores in the next year. Mango’s goal is to have 40 stores in the United States by 2024 to become one of the five largest turnover markets.
Another destination with interests in the US is Banco Santander. It has approximately 14,600 employees in the US, mainly across the East (headquarters in Boston and a significant presence in New York), Texas (headquarters in Dallas) and Florida (headquarters in Miami). The company acknowledges that it does not perceive a negative impact on its activity due to the recent trade conflicts between the US, the EU and China, nor is it particularly affected by the supply problems or disruption of the value chain in that market. The United States has more and more weight in Santander’s accounts and is the largest financial market in the world supported by a solid currency that is subject to fluctuations that occur in other geographies, especially in South America. Santander sources acknowledge that one of the big problems is the need for familiarity in the immense volume of the existing arrangement, with multiple institutions involved in monitoring companies with a presence in the country.
Legal framework
US law provides for an immediate increase in the contract value threshold of US-made products or parts to 60% (effective October 25, 2022); a second increase to 65% for two years (applicable between 2024 and 2028); and to reach the 75% threshold in 2029. With these incentives, many firms that start their presence in the US will consider the possibility of producing for the US market from production plants located there. Other protection-type measures have been implemented in the US, therefore ICEX recognizes that all “are desirable to have a greater presence in the United States of America and to opt for establishment on the ground. However, the anticipated growth must also be accepted. due to the costs of supplies and intermediate goods and the shortage of labor In the event, in in the medium term, the US market will remain the largest consumer market in the world, with a large potential of households and with the expectation of positive growth.
But the hopes are very good. More than half of the Spanish companies that operate in North America or are set to recover in the future the levels of business before the pandemic, while a third is convinced that this recovery will take place in 2023 and 12% until the time to wait. 2024, according to a study carried out by the Spanish Brands Market (FMRE) in collaboration with ICEX Spain. They estimate that the biggest challenge will be the entry of new competitors, 45.9%, followed by regulatory changes in 34.3%. On the other hand, the greatest strengths indicated by the surveyed companies are the quality (63%) of the products offered, the image and value of the brand (71%) and the competitive price (67%).
