- Global Trade Dropped to 3.3% In 2018
- Trade Wars Weighed on Global Trade in 2018
- Global Economy Cooling Down Amid Growing Uncertainties
Global trade slowed down to 3.3 per cent in 2018 compared to the 4.7 per cent growth in 2017, according to Statistics Netherlands.
Growth in global value chains has fallen in recent years. After a decline of 1.8 per cent in November 2018, global trade declined further to 1.7 per cent in December 2018.
World trade fell at the end of 2018, as the imports to and exports from China dropped. This, resulting from China’s transitioning from export and investment-driven growth towards domestic consumption.
China’s about 1.5 per cent point contribution to world trade has been falling as the country continues to pursue its devised strategy of self-sufficiency.
The ongoing escalating trade tension is attributed as one of the major causes of the slowdown. Although US figure is not obtainable at the moment, however, figures for October and November are significantly below September levels, and this may be the result of US elevated tariffs.
For the world as a whole, the direct effects of tariffs seem to have been limited on the aggregate level, being that most of the tariff mainly kicked in during 2H18, but indirect effects such as declining business confidence are suppressing world trade.
Also, the cooling down of the world economy and underlying changes in world trade also caused slower trade growth.
The World Trade Organization Director-General, Roberto Azevêdo while speaking on this in an earlier press release published on the Organization’s website, said that the decline reflects the tension between major trading partners, noting that the partners should resolve their differences.
“While trade growth remains strong, this downgrade reflects the heightened tensions that we are seeing between major trading partners. More than ever, it is critical for governments to work through their differences and show restraint. The WTO will continue to support those efforts and ensure that trade remains a driver of better living standards, growth and job creation around the globe,” Azevêdo said.