Companies in the US are positive about their international business prospects, despite concerns over the elimination and renegotiation of free trade agreements (FTAs) by the Trump administration.

The fourth Wells Fargo International Business Indicator, published today, shows that 81% of companies expect their international business activity to increase in the next year, up from 64% in 2016, based on the positive effect of a strong US dollar and the recovery of the domestic economy. 68% of respondents also expect their international revenue to increase, up from 58% last year.

Wells Fargo surveyed more than 280 business leaders from American companies with annual revenues of US$50mn or more. The study began just after the November presidential election and ended after Donald Trump’s inauguration on January 20, therefore will not account for hopes or concerns arisen over the most recent weeks and months of his reign.

To support their international business growth, companies also expect to increase global marketing activities (79%), volume of imports (63%) and volume of exports (55%). 95% of respondents believe that emerging markets offer the greatest revenue growth opportunities.

Among the factors affecting their international growth potential, companies named foreign exchange rates (97%), US corporate taxes (91%) and the low US interest rate environment (86%).

Moreover, the survey found that 86% of US companies are concerned about potential changes to existing trade pacts and agree that the failure of trade agreements will impact their business.

78% of respondents were somewhat or very concerned about the growing negative attitudes towards trade agreements that emerged during the 2016 presidential election campaign, and the events that have followed Trump’s inauguration on the trade front are likely to have hampered companies’ optimism somewhat.

Asked about the importance of specific trade pacts to their international business, companies named the Trans-Pacific Partnership (TPP) as the most important (80%).

Withdrawing from this agreement was one of the first things President Trump did after taking office. The North American Free Trade Agreement (Nafta) was listed as the second-most important pact (74%), followed by the Transatlantic Trade and Investment Partnership (TTIP; 73%). Nafta is expected to be renegotiated this year, and many observers believe between Trump’s protectionist agenda and the UK’s pending exit from the EU, TTIP is dead in the water.

“There seems to be a relative amount of optimism in the US, part of that was because of the change in administration related to the thought that there would be some deregulation. The international business indicators survey shows that most respondents are relatively positive about trade going forward. They see opportunities for growth internationally.

“That’s a good thing for trade. But then we have the issue of the administration having decided to pull the plug on the TPP and TTIP, so we’re not really sure where all of this is going. From my perspective, it’s guarded optimism going forward,” says Chris Lewis, Wells Fargo’s global head of trade services, in an interview with GTR.

“There has been a definite surge in optimism since the election. The durability of that optimism will be tested as key issues like taxes and regulation are addressed. Outcomes around trade policy and negotiations are critical to firms with international business and will determine the sustainability of that optimism,” adds Chris Barnes, managing director, financial services, for Market Strategies International, the research company that conducted the research.

Most business leaders (two-thirds) did not expect Brexit to have an important impact on their business with the UK and EU. However, 38% were concerned about increased regulations for transactions, 26% worried about less favourable tax policies and 23% about a UK or EU recession as a result of Brexit.

For the fourth consecutive year, China remained the top “hot spot” for future growth, with 41% of US companies expecting the country to be important to their future business success. Canada, which had fallen out of the top three in 2016, is now tied with China at 41%, followed by Mexico with 32%.

Among the events that could negatively affect their international business plans, the majority of companies (91%) listed cyberattacks as their top concern. Political stability outside of the US was named by 83%, up from 58% in 2016, followed by potential interest rate increases by the Federal Reserve (80%, up from 42% in 2016).