How the coronavirus will affect global trade, what companies need to expect from this epidemic and how they need to prepare?

By

Juan Sebastian Perez

Published: 

March 1st, 2020

Pete Mento, the vice president of Global Trade magazine gave some information about the international trade based on the different events which occur around the world and how companies prepare for these repercussions. Global trade is defined as the flux of goods and services across the world. The import and export around the world are affected because of different factors. For example, the sudden respiratory syndrome(SARS) in China in 2003 cost the global economy around 40 billion dollars. Recently, a new virus has affected the international supply chain. In fact, a virus from China called the coronavirus spread worldwide and killed more than 2,700 people. One of the main reasons this virus spread worldwide is because of the chinese Lunar New Year holiday. Between early January and mid-February, millions of chinese come to China to visit relatives for this event. This epidemic could cause many negative issues beginning with the economic aspect. China is a central manufacturing hub of many global business operations. Therefore, any instability in the chinese supply chain will affect the chinese economy but also the global economy. Another factor of this epidemic is the contract between China and the United States about the 200 billions dollars deals of sales by Donald Trump. This epidemic potentially impedes the deal by dragging on the supply chain. 

Companies are anticipating the consequences. Firms put in place what are called disaster recovery plans. For the coronavirus case, the companies are making sure that they have other suppliers, other labor production. Consequently, a war for the new best place to produce between Malaysia,Indonesia  and Indonesia opened. The coronavirus impact the health world’s population, as well as the economy.