The Impact of Covid-19 on International Trade

Did you know that approximately 25% of companies worldwide had their sales fall by almost 50% during the pandemic? Global trade came to a halting stop with the spread of the COVID-19 virus, and it has been two years of reworking a new trade industry. 

Have you wondered how the pandemic has affected (and continues to affect) global trade? A new era includes remote work, international worker shortages, and high inflation. Even with these changes, you may want to stay on top of international trade regarding your industry.

We have you covered. Keep reading on below and learn more about what industries were hit the hardest during COVID-19 and what the future could bring. 

Export Trade

Countries and suppliers exporting materials or products were significantly affected by the COVID-19 impact. Social distancing and lockdowns made it challenging for workers to make it to their jobs. Additionally, the increase in cases made some people too ill to come to work. 

You can imagine what suppliers faced - significant shortages. With shortages, production declined, and port handling fees increased as transportation became scarcer. 

Countries exporting much-needed commodities were affected the most. Food and other essentials require on-site work compared to some non-essential exports.  

The bright spot in exporting countries is remote work has changed the playing field. Exporting can start increasing in industries with opportunities for remote work. Once this happens, prices can begin leveling.

Unfortunately, studies show that this is not sustainable across all exporting industries. In manufacturing, only 22% of jobs could transition to remote work. 

Exporting Countries Affected 

The three main exporting countries trading globally that were affected included:

  - United States

  - China

  - Germany

In 2020, China showed the sharpest drop in exports but recovered the fastest. In July, the United States was still down approximately USD 20 billion, whereas China had increased its exports by USD 40 billion.

Unfortunately, while some countries began recovering, there was a considerable decline in other regions. One, in particular, is car manufacturers. Cars and US airplane parts decreased by USD billions during 2020 and are currently working towards recovery. 

Vaccine Exports

One industry that thrived during international trade was vaccines. Pharmaceutical industries and manufacturing plants experienced growth during the height of the COVID-19 pandemic. The top exporters for vaccines are:

  - Belgium

  - China

  - United States

However, vaccine exports increased throughout most of the world. In some places, there was growth over 1,000 percentile points.

While Belgium primarily distributed vaccines to Europe, the United States exported vaccines to North and South America. By itself, Belgium tallied almost USD 20 billion in vaccine distribution. 

Importing Countries

How do the changes seen in exporting countries affect imports? The trade industry and COVID-19 impact created a large shift towards online shopping and purchases. However, a couple of things happened at the beginning of the COVID-19 pandemic that affected an item's import and trade. 

At first, incomes were cut, jobs were lost, and people primarily remained at home. Demand decreased as fewer people ventured into malls or grocery stores. Next, essential purchases increased tremendously as panic ensued. 

More people purchased fruits, vegetables, toilet paper, face masks, and cleaning products. These industries likely saw an increase in demand during the COVID-19 pandemic. It is unlikely it will remain elevated, but cleaning products and hand sanitizer are still being purchased in high numbers. 

Online shopping will likely persist. This places higher demand on electronics and IT departments that manufacture laptops, smartphones, tablets, and more. 

Global Trade Industries Struggling

Currently, the lack of raw materials and workers makes it difficult for some industries to rebound. Germany and the United States don't have enough truck drivers, making the transportation of goods virtually impossible to keep up with. 

Towards the end of 2021, experts predicted the global supply chain lags were likely to continue. What are some industries that are affected by this bottlenecking?

  - Auto

  - Electronics

  - Meat

  - Household products

However, because of shortages in delivering goods across the country or through ports, every industry is affected. The least affected industries are ones with:

  - Wide profit margins

  - Low raw materials

  - Smaller workforces

Technology, IT departments, finance, and healthcare should all continue recovering and performing well post-pandemic. What can citizens expect? Higher costs, lower shelf supplies, and increased wait times. 

Potential Partner Assessment

Company data is critical for understanding who you should trade with, especially during these unprecedented times. SkyMinder provides risk information that helps you better understand international markets. There are five main components when it comes to assessing company information and future trade partners, including:

  - Data availability

  - Market needs

  - Strategic information

  - Country information

  - Risk level

Supply chain shortages and heightened demands are taking their toll on industries. This makes business information even more critical during recovery. 

Future of Global Trade

When are experts predicting that markets and trade will start returning to 2019 levels? Well, the hope is never. 

The lessons learned are that the world's system wasn't sustainable. The goal for the future is a more resilient trade network that can support each other rather than being dependent on one nation.

Diversification with trade can benefit the globalization of trade. In return, more countries can start contributing to the trade industry. 

Finding Data on International Businesses

Global trade is critical for your business's success. It can help increase revenue and bring opportunity and growth to the economy. In today's age, global trade is hindered by bottlenecked supply chains, reliance on exporting countries, and employee shortages. 

At SkyMinder, we deliver business data and information that can help keep you informed on international and local trade. You can get reliable financial data about a potential partner located everywhere in the world.

Check out our website and fill out a contact form today. We will get back to you as soon as possible!