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The Reverse Midas Touch
Chaotic Trump policies threaten American localization companies
By Katie Botkin
I
n the United States (US), global business is precarious due to the Trump Administration’s fluctuating tariffs and unpopular foreign policies: Stock markets are volatile, cryptocurrency values are down, gross domestic product (GDP) is dropping, the US dollar is weakened, exports are slowing, and US products face boycotts around the globe. This grim economic environment threatens US-based companies with supply-chain shortages, reduced business, and financial hardship.
The localization industry is already seeing these effects play out, and they will likely continue in the coming months and years. In May 2025, two leaders in the American language sector — Don DePalma, Chief Research Officer (CRO) at localization market analysis firm CSA Research, and Adam Asnes, Chief Executive Officer (CEO) of software localization company Lingoport — weighed in on the impacts of tariff uncertainty, emerging budget constraints, and targeted consumer action.
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Responding to Uncertainty
DePalma noted that “nearly everyone we talk to [in the localization industry] has been thrown off balance by the uncertainty surrounding tariffs announced by the president, and in some cases rescinded, then restated.”
This uncertainty is quantifiable. In early May, DePalma said, “The financial analyst firm FactSet analyzed earnings calls from the first quarter. It found that corporate executives used the word ‘uncertain’ in 87 percent of earnings calls compared to 38 percent for the preceding three months; referenced ‘tariffs’ in 93 percent of calls; and mentioned ‘recession’ in 30 percent of calls versus just 3 percent in the previous quarter.”
And executives have good reason to be uneasy. “There’s been some blowback from the tariff war, especially with China, which is a major target of the US tariff policy,” said DePalma. “US companies doing business with China have commented on some pullback and delays in deals.”
Investing Less in Localization
Asnes is concerned that financially struggling clients will need to reduce their localization budgets or opt out of localization altogether.
“Someone I talked to recently said that translation will always be done to get business even if sales volume is down, but I don’t agree with that,” he said. “It is quite possible that companies may think in terms of holding off budget for globalization expansion. Companies may choose to limp along with the status quo and not invest in productivity, cost savings, and expansion, as any of those still take budget initiative and leadership.”
DePalma is already seeing this in action. “It’s too early to quantify the overall effect of these tariffs on the localization industry, but we have seen a substantive pause in purchasing language services and technology,” he said. “It’s not on the scale of how artificial intelligence (AI) is affecting the industry, but it is notable.”
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Taking Business Elsewhere
Traditionally, many sectors of the global market have been dominated by US products, but as the rest of the world sours on US policies, promises, and billionaires, new opportunities may open up for non-US companies.
“We’ve given worldwide buyers a reason to consider not doing business with an American company,” summarized Asnes.
Consumers both outside and inside the US have indicated that they’re willing to invest in brands that are not associated with Trump or pro-Trump tech billionaires. For example, companies owned by Trump advisor Elon Musk have taken a hit:
- Bluesky — an alternative to social media site X (formerly Twitter) — saw a 300 percent usage jump after Trump’s election.
- German BMW and Chinese BYD picked up market share in early 2025, while Tesla’s sales and stock price fell sharply following Trump’s inauguration.
- SpaceX recently lost business in Mexico when telecommunications mogul Carlos Slim nixed collaboration with Musk, and SpaceX’s Starlink internet service lost a CAD $100 million contract with Canadian province Ontario due to the company’s ties with Musk.
Similarly, US companies that comply with Trump directives have faced backlash. For example, retail chain Target was the subject of boycotts after it axed its diversity, equity, and inclusion (DEI) initiatives in response to a Trump executive order discouraging DEI. In contrast, competitor Costco saw strong sales growth after it renewed its commitment to DEI, and its stock rose in the same time period.
Given these trends, the localization market is likely to increasingly choose domestic trade and trade with stronger global partners — between Canada and France, for example, as well as between China and Brazil.
“Just as these companies’ non-American users and customers can choose alternatives for the products they would otherwise buy from US companies, most localization buyers will find that the services they need are similarly fungible — that is, translation in any direction is widely available,” said DePalma.
Looking Ahead
The possibility of outside global brands taking over US market share is real, if tenuous. Although tariffs have fluctuated, the instability itself has made former allies reconsider relying on the US. Even with a future change in regime, much damage has already been done and would be difficult to undo. Over the long term, if such economic instability continues, it may mean that companies would benefit from headquartering outside the US, even if the founders themselves are US-based.
However, both Asnes and DePalma pointed out that the situation could change quickly.
“I should note that we’re talking today in mid-May about a very fluid geopolitical and economic situation that will likely continue to be volatile for a while,” said DePalma. “Given the general feeling of uncertainty we’re talking about and the policies causing it, who knows where the world will be by the time this article is published? By that time, the global economy might be in an unfettered reciprocal trade war. Or we could all be enjoying a sublime state of economic bliss.”
Katie Botkin is a freelance writer with a master’s degree in linguistics. She has worked in the localization industry since 2008. Additionally, she is the executive director of a land-use nonprofit specializing in planning for a more resilient future.
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