Published on Monday, June 29, 2020

Global | For the love of trade

The drop in the volume of global trade is reflecting the most severe global recession since the Second World War, both due to the economies affected and the intensity of the expected falls in GDP over the middle quarters of 2020.

Key points

  • Key points:
  • The BBVA Research indicator relating to the global trade of goods showed a year-on-year decline of 14% in May, and the World Trade Organization (WTO) estimates that the figure will be 18% for June.
  • The gradual opening of economies, from east to west, from China to America, will sooner or later bring about a more or less incomplete V-shaped recovery of global trade growth.
  • Nevertheless, the improvement in the second half of 2020 and 2021 will likely only be partial, and will not be sufficient to bring imports and exports back up to 2019 levels.
  • The relationship between China and the United States has gone from one of understanding to one of strategic confrontation in pursuit of global leadership, which makes the formation of regional trading blocs, according to their areas of political influence, more likely.
  • Europe will seek to drive home its concerns around environmental and social sustainability, and to assert its autonomy in strategic activities (digitalization, electrification and artificial intelligence).

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