Although international trade proved to be more resilient than during previous global crises, the disruptions brought about by the pandemic led to calls for reshoring of goods and a larger focus on domestic production.
Global trade needs to learn from the supply chain disruptions caused by the COVID-19 pandemic and become more diverse, not less, Gita Gopinath, the First Deputy Managing Director of the International Monetary Fund (IMF), tweeted on Tuesday.
The economic turmoil caused by the pandemic had exposed the vulnerabilities in supply chains and led to the call for higher domestic production of goods, new IMF research has revealed. The lockdowns in countries had international spillovers, leading to larger declines in imports of goods.
In the first half of 2020, lockdowns in countries, which are trade partners to others, accounted for up to 60 percent on an average of the decline in imports, the research said. Industries that are heavily dependent on global value chains, such as electronics, were largely impacted by the disruption.