This week, U.S.A. Today reported a plummeting of orders for some exporters to Russia, as businesses began to feel the immediate effects of the recent political standoff over Ukraine’s Crimea region. According to the article, U.S. exports to Russia reached $11.2 billion last year, or just 0.5 percent of total U.S. exports, but they've nearly doubled since 2010. This has created some stalling business for companies that export regularly to the region. Specifically:

“Radi Al-Rashed, CEO of International Chem-Crete Co. of Dallas, says that two weeks ago his dealer for Russia and Ukraine placed on hold a $432,000 order for the company's product, which is used to prevent airport runways and roads from freezing.

"We worked hard for two years to increase our exports and now we have this crisis and…we don't know what's going to happen," Al-Rashed says. A sharp drop-off of his Russian sales could cut revenue by about 20 percent, he estimates.

The Louisiana Caviar Co. of New Orleans stopped exporting to Russia entirely a couple of months ago as tensions with Ukraine grew and Russian restaurants and grocery stores abruptly cut off caviar orders.

"I just saw it as anti-American sentiment," says company owner John Burke. Russian sales made up about 20 percent of his revenue…”

This isn’t the first time global political turmoil has created swift ramifications for manufacturers and distributors. Earlier this month, Nissan was stalled by volatility in Thailand, due to unrest in the capital city of Bangkok.

Nissan, who has an 8 percent share of Southeast Asia's auto market and hopes to expand its share to 15 percent by 2016, suggested the turmoil was "just a short term issue" in the backdrop of the company's long term plans. IHS, the global information company, was not so optimistic, and predicted car sales in Thailand to drop by 19 percent to around 1.08 million vehicles this year due to the unrest and the termination of a government subsidy for first-time car buyers.

In August, Toyota, Suzuki, and GM had to halt production in Egypt when a state of emergency was declared during protests in Cairo. At the time, IHS said the risk to businesses and investors in the region had risen dramatically since 2011.

But when it comes to Russia, there are opportunities at hand, say some, though others would argue that the risks could outweigh the benefits.

By: DocMemory
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