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A column by U.S. Senator Rand Paul of Kentucky in The Wall Street Journal last week made the point that expansion of global trade since the end of the Second World War has been one of the main contributing factors to income growth in the United States. It can also be argued that it has been the primary driver of the economic rise of emerging markets.

China, a poverty-stricken country immersed in a bitter civil war in 1945, is now an economic powerhouse with a burgeoning middle class, thanks to trade. The methods Beijing used to get there are controversial, but they have worked.

India, Mexico and South Korea are other examples of nations that have grown their economies at an above-average pace thanks to trade.

In his column, Mr. Paul quoted former president Ronald Reagan as saying: “Free trade serves the cause of economic progress, and it serves the cause of world peace.” Donald Trump, take note.

Canada has always been a trading nation. Our 2022 ratio of trade to gross domestic product (GDP) was 66.56 per cent. Any threat to our ability to export would mean serious trouble for our standard of living.

Unfortunately, that’s a concern the world is facing now. The risks to international trade are greater than at any time in more than a half-century and come from a variety of sources. They include:

- The U.S. presidential election: Next week, Americans elect a new president. Both candidates espouse protectionist policies, so Canadian diplomats will have their hands full, whoever wins.

But Donald Trump appears to be the greater threat. He has repeatedly said that “tariff” is one of the most beautiful words in the language and has promised to impose a minimum 10-per-cent fee on all products imported into the U.S. (60 per cent on Chinese imports). Canada might be protected by the United States-Mexico-Canada Agreement (USMCA), which was negotiated during Mr. Trump’s 2017-21 term as president to replace the North American Free Trade Agreement (NAFTA). But don’t bet on it.

- Conflicts. The prolonged war in Gaza has prompted the Iranian-backed Houthi rebels in Yemen to attack merchant ships in the Red Sea, claiming they are doing so in support of Hamas. A few ships have been sunk, others damaged, and transport in a critical sea lane disrupted. Efforts by the U.S. and Britain to destroy Houthi launching sites have had limited success. As a result, some companies have ordered their merchant ships to avoid the area, diverting them around the Cape of Good Hope off South Africa – a costly and time-consuming detour.

If the conflict in the Middle East expands further, shipping in the Persian Gulf and beyond could also be affected.

- Sanctions: So many countries and individuals are under sanctions that it’s almost impossible to keep up. Russia, Iran and North Korea are the three major countries affected.

This messy international trade picture is a nightmare for exporters, importers and shippers. One company that works to find solutions is Canadian-based Descartes Systems Group Inc. (DSG-T, DSGX-Q).

The company, which is based in Waterloo, Ont., operates a global logistics network designed to help shippers, carriers and logistics service providers navigate a complex trade landscape.

“Supply chains and logistics operations continue to struggle to manage a myriad of factors, including military conflicts, disruptions to trade routes, government sanctions, economic impact on shipping demand and material changes to taxes and tariffs,” Edward J. Ryan, Descartes’s chief executive officer, said when the company released its results for its 2025 fiscal second quarter ended July 31.

“We continue to make investments to help isolate our customers from this complexity with a broader set of solutions to manage the complete lifecycle of shipments in a secure and efficient manner.”

The continuing trade problems have provided a big boost to the company’s business. Revenue for the second quarter was US$163.4-million, up 14 per cent from US$143.4-million in the same quarter last year.

Net income was US$34.7-million, up 23 per cent from US$28.1-million in the second quarter of the 2024 fiscal year. Earnings per share on a diluted basis were US$0.40, up 25 per cent from US$0.32 last year.

For the first half of the 2025 fiscal year, Descartes reported revenue of US$314.8-million, up 12 per cent from US$280-million in the same period a year ago. Net income was US$69.3-million, up 21 per cent from US$57.5-million. Earnings per share on a diluted basis were US$0.80, up 21 per cent from US$0.66 a year ago.

The company’s wide range of services includes routing, customs and regulatory compliance, e-commerce shipping and fulfilment solutions, transportation management, global trade intelligence and more.

All this may seem dull on paper, but international trade couldn’t function without services of this type.

The company’s success is attracting attention from major institutional investors. At the end of last year, Bank of Nova Scotia increased its holdings in Descartes by acquiring an additional 243,319 shares for its investment portfolio at a price of US$84.06 a share. BNS now owns 679,574 shares, with a market value of about US$71-million.

We recommended Descartes in my Internet Wealth Builder newsletter in October, 2017, at C$37.83 (US$29.45). The shares recently hit an all-time high of C$149.07 before pulling back a little. The stock closed on Oct. 25 at C$144.62 (US$104.17) for a gain of 282 per cent in Canadian-dollar terms since it was recommended.

Action now: If you don’t have a position, take advantage of the dip and buy. World trade is likely to become even more complicated after next week’s U.S. election. Without companies like Descartes, the whole system would be in danger of collapsing.

Gordon Pape is editor and publisher of the Internet Wealth Builder and Income Investor newsletters.

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