Changes in global trade on the horizon
Worsening geopolitical tensions, disrupted economies and supply chains – the health crisis is having a dramatic effect on global trade. What will the new economic map look like?
Boston Consulting Group has come up with a global-trade forecast through to 2023 – the date by which it believes trade volumes will be back to their 2019 levels. However, in the short term, major changes are upcoming:
- Trade will slow or shrink. BCG sees a sharp reduction in trade between China and the United States (in both directions) and a clear slowing of flows between the US and the European Union. Likewise, EU-China, EU-India, and EU-South America trade will decline.
- A winner will emerge. Southeast Asia will see significant gains, increasing its trade with the EU, the US, and China, although at a slower pace than before.
- The type of goods being traded will change. Tensions surrounding the supply of medical equipment, biopharmaceutical products, semiconductors, and consumer electronics are encouraging states and businesses to rethink their supply chains. They will expand their supply pool and even repatriate a part of it.
- The environment is increasingly a concern. The European Commission intends to roll out a carbon tax on imports, which will clearly have an impact on trade competitiveness.
Changes in global trade are speeding up. Are they on your radar?
To go further: “Redrawing the Map of Global Trade” by Ben Aylor, Megan DeFauw, Marc Gilbert, Claudio Knizek, Nikolaus Lang, Iacob Koch-Weser, and Michael McAdoo (Boston Consulting Group, July 2020)