Policy Article

The Covid-19 trade contraction: A view from global shipping, the EU and China

Kiel Policy Briefs, Special Corona-Update 4, 20.05.2020 Download

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This policy brief examines the effects of the Covid19 pandemic on international trade. Major exporting economies have posted record year-over-year monthly declines in export volume ranging from -7.9% in Germany to -24.3% in South Korea. While logistical bottlenecks are being solved, low demand puts pressure on trade activity. The shipping industry has reduced its activity around Europe, Asia and America by up to -10% pointing to a prolonged reduction in trade. Over the first quarter of 2020, China’s trade contracted severely with most economies – particularly Canada, Japan, Russia, Italy and South Africa.The trade collapse affects businesses differently and especially hits those firms that participate in low-value added stages of global value chains by assembling components.

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