This article first appeared on the EACCNY website. It is part of a series of articles written by Marc S. Friedman, Director of Professional Relations at Global Commerce Education, Inc. as a collaboration with the European American Chamber of Commerce in New York.
In the most recent article in this series, I explained how many non-US companies are discouraged from exploiting a robust US marketplace by Myth #3 –there are so many methods of market entry that it is impossible to know which is best for my company. In this installment, I will address Myth #4 – There are too many governmental regulations that will make it very difficult to grow a business in the US. Like the other Myths, this one, too, is easily debunked.
Many European businesses have been discouraged from expanding to the US because of the mistaken belief that, generally speaking, there are too many governmental regulations with which to contend. If this were true, the number of non-US companies expanding to America would be contracting rather than, as is the case, growing in number. According to the Pew Research Group, Foreign-owned companies employed 6.8 million workers in the United States in 2015, up 22% from 2007, according to preliminary data from the U.S. Bureau of Economic Analysis. The increase is notably larger than overall U.S. private employment growth, which was 3.6% over the same span. And no doubt the number of non-US businesses, including European companies, expanding to the US has continued to grow.
In addition, the number of business regulations, many of which apply to small and medium businesses and even startups, is decreasing. One of President Trump’s campaign promises was that he would reduce the regulatory burdens on businesses. Thus, shortly after he was elected, President Trump issued Executive Order 13771 that provided that for every new business regulation passed by a Federal agency, that agencies had to eliminate two existing regulations. Since Inauguration Day, President Trump has slashed well over 1,500 planned regulatory actions. The Trump administration claims it has repealed 22 regulations for each new rule issued, cutting regulatory costs by more than $8 billion. In fact, Federal regulations are now at their “lowest count since records began being kept in the mid-1970s. In 2017 the total number of pages in the Federal Register, the government’s regulatory bible, went from 95,894 in 2016 to 61,308 pages in 2017. That’s a decline of 36% and the lowest since 1993. This year it will go even lower.
The regulations that have been eliminated cover a variety of areas, including agriculture, commerce, shipping, the Internet, food and nutrition labeling, medical care, Homeland Security, forests and wildlife, labor and taxation, banking and insurance, the environment, and small business loans, in addition to others.
Thus, the myth that the existence of governmental regulation should discourage you from expanding to the US is untrue for at least three reasons. First, the number of foreign companies expanding to the US keeps increasing. Second, the number of Federal regulations that govern businesses of all sizes has been shrinking. And third, the US economy is extremely strong, US consumer confidence is at an 18 year high, and business confidence in the US economy continues to grow. As a result, for these and many other reasons, the US is a very fertile marketplace for European companies, including those from the Baltic States.
In the next article in this series I will address Myth #5 – If we enter the US we may be jeopardizing our valuable intellectual property.
Compliments of Global Commerce Education, a member of the EACCNY