The World Trade Organisation (WTO) estimates that trades across the world could fall in the range of 13-32pc on the back of COVID-19 pandemic. Industries with complex value chains like electronics and automotive are likely to be hit the hardest. A fall in auto and electronic trade would, in turn, would impact the demand for metals like steel, aluminium and copper, among others.
The apex organisation also believes exports from North American and Asia would suffer the most, with nearly all global regions registering a double-digit fall. Global trade was marred in 2019 due to sluggish economic growth and trade tensions between countries. The value of world merchandise exports was at $18.89 trillion in 2019, down by 3pc from the prior year. In terms of volume, merchandise exports dropped by 0.1pc from 2018.
WTO forecasts 2020 to register a steeper decline than the great trade collapse between Q3 2008 and Q2 2009. The fall can be majorly attributed to transport and travel restrictions, as well as curbs on labour and workforce movement as countries seal their boundaries. The rebound in 2021 would depend on the measures that countries roll out to combat the economic impact of the pandemic and how long the virus disruptions will last. The report further adds if the situation is controlled soon and trade expands, most regions could record a rebound of 21-24pc.