Question

Assuming you are CEO of an international trading company, which mainly engaged in trade activities between China, the United States and European countries. Please analyze and discuss in depth the impacts of the Coronavirus Disease 2019 (COVID-19) on both the international trade system and your company according to theories of international trade and relevant news during the global epidemic. Tips: the trading product or service of your company can be subjectively assumed.

Answer 1

The impacts of the Coronavirus Disease 2019 (COVID-19) on the international trade system are as follows:

· The global GDP has declined by 13%, indicating that most countries have failed to maintain a steady economic structure from March 2020 to June 2020.

· It has created uncertainty in global trade policy in terms of its scale of infection. Trade organizations across the globe have failed to address the rational initiative to run their business. They have been unable to understand the amount of infection, and the amount of harm the virus can do. Thus, there is a complete pandemonium in the global business fraternity in terms of strategy-making.

· Global business depends on traveling beyond the border, which is still restricted in most countries because of nationwide lockdown policies for maintaining social distancing. It has crucially affected mostly the automobile manufacturing industry around the world. Initially, automobile organizations like General Motors mostly adopted the global strategic rivalry theory to gain a competitive advantage in the worldwide car industry. However, the business has faced a vigorous decline after Covid19.

The impacts of the Coronavirus Disease 2019 (COVID-19) on the trading system of General Motors are as follows:

· The company has a miserable trade result after the Coid19 impact as it has stopped the production operations in North America from 30th March 2020

· Coronavirus has compelled General Motors to stay away from its core products because of the rapid decline in demand for cars and to develop ventilators for healthcare organizations. The need for four-wheelers has declined by 25% in the USA, which is the highest decline in the last five years.

· General Motors have planned to change their strategy from cost leadership pricing strategy to low-cost strategy for attracting at least a few customers who can buy even at this time. It has eased its payment options, and EMI schemes to keep sustainability with its low-cost strategy.