Euler estimates global losses in world trade

According to Euler Hermes' calculations, existing measures to limit the spread of the Covid-19 epidemic already represent the equivalent of +0.7 percentage points of additional tariffs on goods – raising the global average tariff rate to a hypothetical level of 6.5 percent at the end of Q1 2020.

In other words, in one quarter, global trade has already suffered losses equivalent to the year-round trade war between the US and China in 2019.
Euler Hermes estimates that losses in trade in goods and services could reach $320 billion per quarter during the current business disruption. Each quarter of trade losses associated with Covid-19 in 2020 is therefore comparable to the year-round impact of the US-China trade dispute on global customs tariffs in 2019.

“Our main assumptions for goods include plant closures in China and Italy and restrictions in other countries. Economists expect that economic activity will be resumed gradually in March and April and will be fully operational by the end of May,” the analysts said.

Export losses should total $161 billion, as demand from China and Europe will remain clearly blocked until the end of April.

Euler experts warned about a significant reduction of tourists from and to China, Italy and, more generally, in Europe, to which they added a significant slowdown in transport services.

(WBJ)