Global trade recovery slows as increased Covid-19 cases result in reduced exports from Taiwan and port closures in Australia, Japan, and China.
Despite experiencing positive international market growth over the summer, recent increases in Covid-19 cases in Asia, particularly in manufacturing centres Taiwan, Japan, and China, are affecting global trade recovery.
Economists from Llewellyn Consulting have stated that Taiwanese export orders year-on-year growth has fallen to 20%, compared to 70% in 2020. Resulting from an 18 month-long backlog, decreased export orders will impact the manufacturing capacity of carmakers and other electronics producers for the remainder of the year. Some automobile companies have already cautioned customers to expect to wait six months or longer for some models.
“World trade continues to be disrupted by port closures, most recently at Ningbo – China’s third largest port – which have also contributed to the enormous increase in shipping container costs this year that result from many containers being stranded in places other than where they are needed,” said the independent consultancy, “Another drag on world trade has been the persistent shortage of semiconductor chips, which are nowadays a crucial input into motor vehicle manufacturing. Given Taiwan’s pivotal role in the global semiconductor industry, the decline in its export orders since February is a harbinger of some further slowing in world trade growth.”
One of the world’s largest iron ore exporters, Australia is expected to avoid its second recession over the past two years, when the country’s GDP reports come out this week. Some experts predict Australia’s latest quarter will have only 0.1% growth whereas others anticipate with recent Covid-19 outbreaks and consequent lockdowns, the country’s GDP will decline.
Some analysts have also cautioned that further Covid-19 outbreaks, especially with the Delta variant, will hinder export growth for countries experiencing low vaccination rates well into 2022.