Despite a general easing in lockdown measures across the world, international trade remained close to Covid-19 lows in May 2020. Whilst tentative signs of recovery are appearing in some economies, particularly in Asia and to a lesser extent in Europe, international trade continues to contract in the Americas. Preliminary data for June confirm that any recovery remains fragile and susceptible to setbacks in containing the pandemic.
Across Asia, trade in computers and parts and medical equipment was robust in May and June but motor vehicle production remained weak. Services trade, particularly business, telecommunications, computer and information services, fared much better but travel and transport services remained subdued.
Korean merchandise trade exports continued to increase (by 5.4% in June, following the 2.0% growth in May), largely reflecting higher shipments to China, but remain 18% lower than in February 2020. Imports were flat, following the 4.0% contraction in May. Korean services exports increased by 5.2% in May, driven by a 22% increase in business services. Travel picked up strongly too (up 23.2% on April) but remains more than 25% below 2019 average levels. Services imports continued to decrease (minus 7.0%) with travel reaching new lows.
China’s merchandise trade exports continued to contract in June (by 1.4%) following the 0.6% decline in May 2020, while imports jumped by 12.8% (after a 1.8% decrease in May), in part reflecting a rebound in commodity prices. Chinese services exports declined by 3.5% in May, (following 4.2% growth in April). Services imports also declined (by 4.4%), driven by travel (which remained at less than half the 2019 average). Imports of telecommunications, computer and information services were up by almost 30% in the first five months of 2020, compared with the same period last year.
Japan’s exports (down 5.3%) and imports (down 11.5%) of merchandise trade fell in May. Trade with China held up but exports to Indonesia, the Philippines and Thailand, all saw large falls. In contrast, services trade picked up strongly in May (16.7% for exports and 8.4% for imports), boosted by business, telecoms and computer services. Travel services saw growth too (9.2% for exports and 3.8% for imports) but remain at only 10% of 2019 averages.
Australian merchandise exports contracted by 7.9% in May (mainly reflecting lower coal, metal ores and minerals exports) and imports also fell (by 4.3%). Following sharp drops in April, Australia’s services trade picked up in May, with exports up 5.2% and imports up 2.4%.
Trade continued to contract in the Americas in May, where the Covid-19 curve is yet to flatten, but production resumed in the automotive industry and oil prices bounced back.
Following a 25% plus drop in April, Canadian merchandise trade exports increased (by only 2.4%) in May but the United States saw exports continue to contract (by 5.8%), on the back of falls in oil products, semiconductors and computers and parts. Canadian imports fell by 3.1% in May but US imports fell by only 0.6% as higher purchases of consumer goods (including mobile phones) partially compensated for lower demand for machinery and cars and parts.
Services trade in North America also continued to deteriorate in May. Exports decreased by 2.0% in the United States, with all sectors but telecoms and computer services contracting. Imports fell marginally (by 1.4%), with insurance, telecoms and computer services partially counterbalancing falls elsewhere. Similarly, Canadian exports of services also fell (by 2.0%) whilst imports were flat, despite the pick-up in travel imports (up 25.9%).
Virtually flat in May (0.1%), Brazilian merchandise exports decreased by 5.3% in June, with higher shipments of agricultural products offsetting sharp contractions in machinery and transport equipment. Imports dropped by 30.9% in June, after recording a 25.4% increase in May. Brazilian exports of services declined by 1.3% in May, while imports picked up, by 19.0%, driven by higher purchases of business services by the mining sector.
Following historic falls in April, merchandise trade started to recover in May for all the major economies in Europe, as production activities resumed and trade with China gained momentum. However, trade remains significantly below pre-crisis levels.
Merchandise trade exports increased by 13.1% in May in France, following the collapse (minus 34%) in April 2020. Imports picked up strongly (by 20.5%), led by transport and communication equipment and textiles (including facemasks). French exports of services, which seem to have endured the crisis better than other major economies in Europe, were flat in May but imports fell by 8.3%. Although still close to historic lows, travel exports (up 44.2%) and imports (up 27.2%) picked-up as restrictions began to ease across Europe.
In Germany, exports (up 9.2%) and imports (up 3.8%) of merchandise trade both grew in May 2020, driven by higher trade with China and a pick-up in trade in cars and car parts and machinery. On the services side, exports and imports in May declined by 5.6% and 1.8%, respectively, with transport and travel services still severely hampered.
For the United Kingdom, with merchandise trade exports and imports at levels not seen since 2003, exports (up 2.5%) and imports (up 0.4%) saw only moderate growth in May. Services exports and imports continued to contract in May (by 1.9% and 2.5%, respectively), following the 50%-plus cumulative falls in March and April.
Merchandise trade exports in Russia continued to fall in May 2020 (by 5.9%) but imports picked-up (by 8.2%). Russian trade in services, which collapsed in April (by over 40%), continued to decrease further in May, with exports falling by 3.4% and imports by 19.8%.
Merchandise exports and imports for selected economies (M-oM growth rate in %)
Services exports and imports for selected economies (M-o-M growth rate in %)
Organization for Economic Co-operation and Development (OECD) contributes this article.