The global trade industry continues to suffer from the effects of the coronavirus pandemic. Global lockdown measures have put a halt on international trade, significantly impacting the consumer demand for overseas products. Although countries are trying their best to ensure that their export levels can be restored to pre-COVID levels, it is becoming increasingly difficult to do so. To make matters worse, the industry has recently been hit harder by new import restrictions that have come into place since July 2020.
The Impact of New Import Restrictions on Global Trade
According to the World Trade Organisation (WTO), global trade may decline by 18% during the latter half of 2020. This figure is significant since it portrays just how much the trade industry has been affected by the pandemic. Unfortunately, new trade restrictions will most likely hit the industry even further. For instance, countries in the Middle East have imposed new restrictions on imports, and these restrictions cover products from almost all industries, thereby hurting the import world. This is alarming since Arab countries are expected to experience an economic contraction of 5.7% before the end of the year, and their economies may shrink by 13%, resulting in a loss of $152 billion. Moreover, an additional 14 million Arabs may join the current 115 million unemployed Arabs, which is a quarter of the total Arab population.
In other parts of the world, such as Europe, extra border checks mean that the import/export process has become much more complicated. These checks have also slowed down the trade process in the region and have led Asian exporters to face new challenges. Industries such as apparel are being hit hard in particular. In fact, apparel exports from Bangladesh and India are already being impacted by the new trade restrictions in Europe.
There is still a lot of uncertainty for the trade industry. Countries are securing their borders to ensure that the virus does not spread in their territory. However, this is hurting the trade industry immensely, and there is no viable resolution in sight. At this rate, it is highly likely that trade volumes will continue to suffer for the next few quarters.
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The new import restrictions will likely hit global trade volumes in a significant manner in the upcoming months. It will be interesting to see how the industry recovers from this new setback. For more information about international trade, please visit the rest of our News Page.
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