Trade Volatility Is Back—And This Time, It’s Structural
Global trade is entering a new era—and the warning signs couldn’t be clearer.
In April 2025, the United States enacted one of the most sweeping tariff packages in modern history. A baseline 10% tariff now applies to nearly all imports, while goods from China, the European Union, and Japan are facing significantly higher duties—up to 54% in some cases. Financial markets reacted swiftly. Over $2 trillion in market capitalization vanished from U.S. equities in a matter of days, while inflation forecasts and recession probabilities were revised upward by major institutions including JPMorgan, Moody’s, and Morningstar.
But for internationally active mid-sized companies, the real impact isn’t just macroeconomic. It’s operational.
Supply chains are being repriced. Input costs are rising. Margins are tightening. And the traditional playbook of exporting into strategic markets from a single hub is rapidly losing viability. This isn’t a one-off policy shock. It’s a structural shift in how global business must now be conducted—where adaptability, localization, and regulatory alignment will define success.
The question is no longer if you should adapt your international model. It’s how fast you can do it—before the next shock hits.
Why Mid-Caps Are Under Pressure
Core Sectors For Investment :
Mid-sized international companies are often described as the backbone of global trade—and rightly so. They’re innovative, agile, and increasingly international in scope. But in a high-tariff, high-volatility environment, these same companies face disproportionate pressure compared to their larger or smaller counterparts.
Here’s why:
Lean international teams. Most mid-caps lack large internal departments dedicated to trade compliance, supply chain restructuring, or tax optimization.
Export-reliant growth. Many mid-caps grow internationally by exporting from a central hub to one or two key foreign markets. This approach maximizes efficiency—but also amplifies exposure when import tariffs change.
Thin margin tolerance. Unlike multinationals with diversified cost structures, mid-caps often have limited flexibility to absorb new costs. A 10–25% increase in import duties can erode already-tight margins.
Limited restructuring capacity. While global giants can reallocate capital to build local operations or negotiate policy exemptions, mid-caps tend to operate with fewer strategic levers and slower change cycles.
These factors don’t just increased risk—they limit response time. And in today’s trade climate, delayed action is costly.
Yet this isn’t all bad news. What mid-sized companies lack in scale, they often make up for in agility. With the right strategy—and the right international support—they can move faster than multinationals and outperform in uncertain conditions.
With no clear timeline for policy reversal—and elections, geopolitical tensions, and trade alliances in flux—successful mid-cap companies will be the ones who turn into strategy: diversifying risk, building resilient supply chains, and implementing scenario planning into day-to-day operations.
In the next section, we’ll explore the first strategic move to help mid-caps regain control: mapping tariff exposure.
“In a Landscape where global disruption is contant, mid-sized companies have the unique advantage of agility. The key is to act early, localize smartly, and embed resilience into every decision.”
Jorge PRATT, Head of Advisory & LATAM, CDMX Mexico
Strategic Move #1: Map Your Trade & Tariff Exposure
The first step to managing disruption is understanding where you’re vulnerable—and where you’re not.
Rising tariffs are creating unpredictable pressure points across global supply chains. But without a detailed map of exposure, companies risk two costly outcomes: overcorrecting with unnecessary operational changes or underestimating their risk and getting caught off guard.
To respond strategically, mid-sized international companies should start by asking three essential questions:
Which revenue streams are now subject to new tariffs—directly or indirectly? Review import and export flows by market. Focus on SKUs, suppliers, and logistics routes connected to countries facing elevated duties (e.g., China, the EU, Japan) and set up regular monitoring.
Where are your costs rising, and by how much? Go beyond high-level assumptions. Tariffs apply at the Harmonized System (HS) code level, meaning a 20% or 54% duty might apply to specific parts, not full products. Knowing the landed cost increase by code is critical for adjusting pricing, margins, and procurement.
Which suppliers, partners, or customers are feeling the pressure—and passing it on? You may not be the importer of record, but cost inflation can flow through your value chain. Map your supplier exposure, especially across upstream components and logistics intermediaries.
“Gain market access and cost advantages by “going local”—and evolve from an export company into a fully international player. Companies based in Mexico, Canada, and LATAM are particularly well-positioned to act as alternative suppliers to U.S. buyers. Businesses in countries with free trade agreements (e.g., USMCA) can capitalize on lower tariff exposure. Position your company as a reliable, cost-effective partner in a restructured global supply chain.”
Jorge PRATT, Head of Advisory & LATAM, CDMX Mexico
Why This Matters Now
The 2025 tariff regime is not static. Trade relationships will continue to evolve throughout the year as retaliatory measures take shape and exceptions emerge. Companies that wait for clarity may find themselves locked into inefficient cost structures or miss the window to adapt.
By developing a structured trade exposure map now, companies gain:
A clear view of cost pressures by product and market
The ability to prioritize mitigation efforts by financial impact
Better coordination between finance, procurement, and operations on risk scenarios
This foundational visibility sets the stage for the more complex—but more rewarding—moves that follow.
Strategic Move #2: Reprioritize Your Global Market Strategy
Even the best international plans can become outdated overnight. With trade rules in flux, input costs rising, and regulatory frameworks tightening, the assumptions that underpinned your 2022 or 2023 market strategy may no longer hold.
That’s why now is the time to revisit a fundamental question: Are we still prioritizing the right countries—for the right reasons?
How to Approach It
Re-score your key markets using new risk and cost data. Go beyond GDP growth and address real-world variables: tariff exposure, logistics friction, access to qualified partners, and compliance complexity. A market that once looked attractive on paper may now carry disproportionate cost or delay risk.
Balance strategic importance with operational feasibility. Some high-growth markets may now require a localized presence to remain cost-competitive. Others may no longer justify further investment without structural change. Rebalancing your market portfolio helps allocate resources more efficiently.
Build flexibility into your 2025–2026 roadmap. Given the policy uncertainty ahead, consider designing expansion plans with staging options—pilot entries, joint ventures, or modular supply models. This allows for faster adjustments as trade dynamics evolve.
Why It Matters
Too often, companies continue to invest in markets that are no longer aligned with their current cost structure or risk tolerance. Others hesitate to pursue new opportunities because their playbook hasn’t been updated for today’s realities.
Reprioritizing your international roadmap isn’t about retreating—it’s about staying strategic.
As the global trade environment reconfigures, having a market strategy that reflects both ambition and adaptability is a key competitive advantage.
Strategic Move #3: Rethink Where And How You Operate
If the 2020s taught us anything, it’s that operational flexibility is now a core component of resilience. In 2025, that truth is being tested again.
With tariffs reshaping the cost of cross-border trade, companies can no longer afford to rely on legacy operating models designed for stability and scale. Mid-sized firms in particular must ask a critical question:
Is our international structure built for yesterday’s trade environment—or tomorrow’s?
How to Approach It
Localize where it makes strategic sense. Tariffs apply to imports, not to goods sold and delivered within a country. Establishing a local footprint—even for final packaging, light assembly, or warehousing—can help bypass duties and reduce landed costs. Going from an export-driven model to a true international presence requires more than just infrastructure. Recruiting local talent and assuring a robust subsidiary management are critical enablers of this transition. Local resources bring market knowledge and build a network with suppliers, subcontractors, customers, and public authorities—elements that are essential for long-term success in an expansion model. In this context, international growth becomes not just a question of logistics, but of leadership and strategic capability on the field.
Shift the final steps of your value chain closer to customers. Many companies underestimate the strategic value of small-scale regional operations. Bringing even 10–20% of value-added activity in-market can improve speed, reduce exposure, and create new compliance benefits.
Diversify sourcing and fulfillment nodes. Relying on a single production country or logistics hub amplifies both tariff and supply chain risk. Building optionality into your operations—even through strategic partnerships—can reduce cost volatility over time.
“As some companies struggle to adapt, opportunities may arise to acquire smaller players or form strategic alliances: Cross-border M&A and Partnerships with local distributors, logistics players, or manufacturers. Expand faster and strengthen your footprint in key markets by partnering rather than building from scratch.”
Jorge PRATT, Head of Advisory LATAM region
Why It Matters
Operating as a pure exporter leaves companies vulnerable. A model built around centralized production and international shipment may have worked in a low-tariff world—but that model is now showing its limits. Localization is no longer just a tactic. It’s a hedge against uncertainty.
In short, international growth is no longer just about expanding sales—it’s about adapting infrastructure.
Strategic Move #4: Embed ESG and Regulatory Resilience
International growth is no longer just about entering the right market—it’s about doing so in a way that aligns with rapidly evolving global standards.
From the EU’s Corporate Sustainability Reporting Directive (CSRD) and Carbon Border Adjustment Mechanism (CBAM) to tightening U.S. sourcing and transparency rules, ESG and regulatory compliance are no longer back-office considerations. They’re now central to market access, financing, and customer trust.
Mid-sized companies that embed these considerations early in their international expansion strategies will be better positioned to navigate—and benefit from—regulatory complexity.
How to Approach It
Make an assessment of your cross-border positions. Some less restrictive and easier to access markets may have been relegated to the background even though they could be your growth drivers for tomorrow. Take the time to identify your strategic markets
Integrate ESG into market entry and expansion planning. Assess how your operations align with environmental, labor, and governance expectations in target markets. This includes emissions tracking, local employment practices, and supplier transparency.
Target markets that reward responsible operations. In many regions, ESG alignment can unlock preferential treatment—ranging from tax incentives to easier permitting, public procurement access, or favorable financing terms.
Design compliance into your operating model. Building in traceability, auditability, and localization isn’t just about avoiding penalties—it creates resilience against future policy shifts. It also strengthens your positioning in increasingly ESG-conscious B2B ecosystems.
Why It Matters
Compliance is no longer a post-expansion checklist. It’s a strategic lever.
Companies that invest early in ESG-aligned structures are more likely to secure capital, attract reliable partners, and win business with customers who demand transparency and accountability across the value chain.
In a world where trade and regulation are increasingly intertwined, embedding ESG isn’t just the right thing to do—it’s the smart thing to do.
Expert Recommandations
“The cards have clearly been reshuffled, even if the United States remains an attractive market for many companies. Many continue to believe in the potential of the US market. In an uncertain and changing global environment, companies that adopt an opportunistic approach are the most exposed. If you put all your eggs in one basket, you run the risk of being hit hard. Conversely, those that have managed to diversify their risks by prioritising their strategic markets will be more resilient in the face of political and economic hazards.
This is precisely where ALTIOS’ support may be needed: we support and structure the international growth of companies, on the basis of carefully considered market choices, as part of a proactive approach.Companies that operate mainly on the basis of opportunism are likely to suffer.Opportunism + passivity = major difficulties and increased dependence on government decisions.Conversely, the right strategy is to establish a long-term presence in key markets..”
LAURE MENARD Director of Advisory practice
Recommantation 1 depending on the company’s situation:
If I have an export-based strategy, it may be worth considering setting up a local presence – even a small one – to consolidate my position in the target country. This will enable critical steps to be taken more quickly, while paving the way for wider regional development.
Recommandation 2, depending on the company’s situation:
Review its international strategy to identify new strategic markets: take stock, analyse growth potential, and consider new areas such as the Emirates, India or South East Asia. Similarly, for European companies, it’s important not to forget that 60% of trade flows are intra-European: Europe remains a powerful lever for development.
How ALTIOS Supports International Resilience
Navigating global volatility requires more than high-level strategy. It takes execution capacity—across borders, functions, and time zones. That’s where ALTIOS delivers tangible value.
We work with mid-sized international businesses, helping them adapt quickly to changing trade, tax, labor, and regulatory environments through hands-on, in-country support.
Here’s how we help companies take action on the four strategic moves outlined above:
Trade Exposure Mapping We provide HS code-level diagnostics, import/export risk mapping, and cost modeling to identify where your business is most affected—and where you have leverage.
Operational Restructuring From entity creation to supply chain realignment, we help companies shift where and how they operate globally. Our teams manage legal setup, HR, tax structuring, and compliance in over 30 countries.
Market Reprioritization We guide clients through data-backed assessments of which markets to pause, enter, or accelerate—based on trade flows, policy risk, cost-to-serve, and regulatory complexity.
ESG & Compliance Integration Our specialists integrate local ESG standards, CSRD requirements, and incentive eligibility into internationalization plans—so expansion aligns with future regulatory landscapes.
Whether you’re entering a new market, restructuring an existing one, or responding to sudden policy shifts, we act as your partner on the ground to reduce friction and increase resilience.
Conclusion: From Exposure to Advantage
Trade volatility is no longer a short-term risk. It’s part of a new operating environment that demands sharper visibility, greater flexibility, and faster execution from mid-sized international companies.
The four strategic moves outlined above—mapping exposure, rethinking operations, reprioritizing markets, and embedding ESG—are not just protective measures. Done right, they become a framework for long-term, resilient growth.
But strategy alone isn’t enough. Turning these insights into operational results requires local knowledge, regulatory fluency, and execution support across jurisdictions.
That’s what ALTIOS delivers.
If your organization is facing cost uncertainty, structural questions, or pressure to adapt faster to a shifting global landscape, this is the right moment to act—not react.
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