The pandemic has shocked and impacted international trade quite heavily. It hasn’t been this impacted since the Great Depression in 1930s. Global trade in 2020 is projected to decline by 20% according to Mckinsey and Company baseline scenario for economic recovery, and it is not projected to regain its 2019 absolute level of $18 trillion until 2023.
The biggest shifts will be:
- Two-way trade between the US and China in 2023 will have shrunk by around 15%, or about $128 billion, from 2019 levels. Trade between the US and the EU will continue to grow, but at a sharply lower rate from the $135 billion surge from 2015 through 2019.
- EU trade with China will have declined by about $30 billion from 2019 through 2023, after growing by $124 billion in the previous four-year period. EU trade with India and South America will flatten.
- Southeast Asia will continue to be one of the strongest gainers, increasing two-way trade by around $22 billion with the EU, $26 billion with the US, and $41 billion with China by the end of 2023, but still at a slower pace than the earlier four-year period.