Question

Use any of the trade models, explain the impacts of COVID-19 pandemic on trade between any two countries.

Answer 1

Answer: We are using International trade model here.

Due to the mpacts of COVID-19 pandemic on trade between any two countries, international trading system become subject to an following challenges:

Increased Export and Import restriction and moreover number of new restrictions and distortions, from tariff increases among major traders has been added, to significant government support in key sectors. Efforts at dialogue to manage and prevent tensions through ongoing negotiations are now complicated by mobility restrictions.

Cost: the costs to the global economy from support packages, through central banks and fiscal actions, are very significant and likely to have long-lasting and complex effects on management of sovereign and corporate debt.

Difficulty in transportation and communication:: For Example, Cancellation of passenger flights linked to travel bans has limited the availability of air cargo while urgent shipping of essential goods has increased demand, resulting in increases in the price of air cargo.

All supply chains are being affected by the need to ensure additional health and safety measures for all participants in the supply chain (which affect costs and time).

Unavailibility of Labour: Lockdowns are also impacted the availability of labour to unload ships at ports (Specifically countries where this is less automated) or raised costs due to increased protective measures for workers.