Trade

WHAT'S NEXT?: Global trade policies could be upended with a new President in the White House, Brexit, a potential break-up of the European Union and China reacting to these changes in profound ways.

• [New] Supply chain disruptions and weaker global trade caused by the coronavirus outbreak represent headwinds for Denmark's exporters and importers early this year.
• [New] A key risk to regional trade is from the transmission effects to the Asia-Pacific supply chain from weaker Chinese economic growth momentum in the first half of 2020, since mainland China is by far the largest economy in the Asia-Pacific region.
• [New] Growth is expected to be 2.4% in 2020 - the weakest growth rate since the Global Crisis, despite accommodative financial conditions and signs of easing trade tensions.
• [New] The growing export market for sustainable aviation fuels is worth up to an additional £1.952bn to 2035 and bringing the full value to the UK of £2.7bn from UK production and global exports.
• [New] Failure to achieve a UK-EU arrangement conducive to trade is also a key risk to the outlook for the UK economy as disruption in early 2021 could adversely affect economic conditions.
• [New] The slowdown of manufacturing in China due to the coronavirus (COVID-19) outbreak is disrupting world trade and could result in a $50 billion decrease in exports across global value chains.
• [New] Although the growth in global trade is likely to slow down this year, Pakistan must consider developing its export sector to take advantage of opportunities as a result of challenges reported by the large manufacturing powerhouses.
• [New] Global milk production is rising, but reduced Chinese imports, supply chain disruptions and increasing dairy surpluses in export regions will put downward pressure on global markets through 2020.
• [New] Supply chain disruptions due to the COVID-19 outbreak in China have dampened trade activity in the first two months of 2020, both from a slowdown in Chinese manufacturing activity and in broader shipping activity.
• [New] The UK government will launch an informal consultation over spring 2020 on the VAT and excise treatment of goods crossing UK borders after the EU exit transition period.
• [New] Export growth is projected to be particularly weak in the first half of 2020, as a result of waning demand in China and other Asian economies, as well as supply side disruptions triggered by the COVID-19 outbreak.
• [New] Q1 and Q2 2020 bring market trading conditions that will test the depths of alternative markets to Australia's number one fresh produce export destination, China.
• The slowing of imports raises doubts that China will be able to meet its target in its trade deal with the US.
• This, combined with expected more than 2-million-bpd supply growth from non-OPEC countries not part of the OPEC + deal in 2020, could continue weighing on oil prices, especially if a trade deal is not reached and economies in Asia continue to suffer.
• Growth of the semiconductor market in 2021 will be positive, provided there is not a further disruption in supply chains from the trade dispute between the U.S. and China.
• Looking ahead, growth is expected to slow down further in 2021 as a result of the weakening impact of tax cuts, the uncertainty related to the trade war that continues to weigh on companies and the spread of the Coronavirus in China, which is a major US trade partner.
• The sharp slowdown in China's economy makes it unlikely that China this year will meet its commitment, under the trade agreement it signed with the US in January, to dramatically increase imports from the US.
• Looking into early 2020, any positive impacts of the 'phase one' trade agreement with the US likely will be countered by the impact of the coronavirus outbreak.
• China's phase - one trade deal with the US as well as the accommodative policy stance of many central banks will support increased risk appetite.
• If Trump is waging a trade war with Europe, the appetite to go along with Washington's plans to curb technology exports to China will be limited.
• Potentially the greatest threat to the single currency in the coming year will be Donald Trump, with observers fearing the US President could look to open a new European front in his trade war as hostilities between the US and China look to die down with the signing of a 'phase one' trade deal.

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Last updated: 26 March 2020