Coronavirus outbreak threatens to dampen global trade

Imports and Exports | | MIC Customs Solutions |

Global trade's hoped-for upturn could be thwarted by economic factors caused by a new disease.

The continuing spread of coronavirus from Asia could threaten the recovery of global trade that had been hoped for in 2020, experts have warned.

Factories across China have been forced to close as authorities attempt to halt the spread of the disease and many businesses have stopped importing from the Asian nation in fear of contracting the virus.

Although the majority of cargo flights are still operating, passenger planes have been grounded to and from China - and more than half of air freight is currently shipped this way.

It is expected that more container shipping services could be cancelled on top of those that were already rescheduled for Chinese New Year.

China is the world's biggest exporter of intermediate goods and many global companies have a presence there, as well as buying a large amount of products from partners there. Indeed, both Peugeot and Renault have operations in Wuhan, the apparent epicentre of the outbreak.

Trade economist at ING Timme Spakman said: "The coronavirus could potentially impact the annual level of world trade in 2020, as it's not certain that factories and logistics will be able to catch up and fully compensate for earlier delays."

Global trade fell in 2019 for the first time in a decade but it had been hoped that with relations between China and the US apparently thawing, the figures would start to pick up again.

Now, though, these hopes may already have been dashed.