Global trade wars may ensue as countries call for enquiry into spread of Covid-19, according to leading macroeconomic influencers

GlobalData Thematic Research 20 May 2020 (Last Updated May 20th, 2020 08:18)

Global trade wars may ensue as countries call for enquiry into spread of Covid-19, according to leading macroeconomic influencers

Global trade wars could result from the devastating economic impact caused by the Covid-19 pandemic. Some countries have held China accountable for not controlling the spread of the disease.

Prof. Steve Hanke

Prof. Steve Hanke, Applied Economist Johns Hopkins University, shared an article on the 80% tariff imposed by China on barley exports from Australia for five years. China is imposing the tariff after Australia became one of 100 countries that called for a probe into the spread of the Covid-19 disease.

Similar actions on other countries are also expected in the near future, with experts predicting that global trade wars are in the making.

Claudia Sahm

Claudia Sahm, a macroeconomist, shared a tweet from the Joint Economic Committee Democrats, on how US President Donald Trump’s pre-pandemic measures of individual and corporate tax cuts and global trade wars have failed to deliver the promised growth.

The article notes that these measures have now left the US more vulnerable than before and the Covid-19 pandemic is further worsening the country’s economic growth.

Howard Archer

Howard Archer, Chief Economic Advisor to EY ITEM Club, tweeted on the sharp rise in unemployment rates in the UK in April. The number of workers who applied for unemployment benefits increased by 856,500 to 2.1 million in April, showing an increase of 69% from March.

The increase in unemployment rates is the biggest ever recorded since July 1996, when the country was recovering from a deep recession. The unemployment rate is expected to reach 10% during the April-June period, according to experts.

Pedro da Costa

Pedro da Costa, Federal Reserve & economy watcher at Market News International, shared an article including a report by the World Economic Forum on the impact of the Covid-19 pandemic. The report notes that the Covid-19 pandemic is expected to create a long-lasting global recession.

The report predicts bankruptcies and consolidation in the industry, apart from high levels of unemployment. Further, the report notes that governments should adopt a green approach to recovery focussing on building sustainable and inclusive economies.