Impact of Covid-19 on International Trade

Using a global monthly unbalanced panel dataset of 70 countries from January 2020 to May 2023, we first examine the impact of COVID-19 on global trade. The empirical results show a detrimental impact of COVID-19 on countries’ foreign trade, which persists over six months. We evaluate the robustness of our findings by employing an alternative dependent variable and different estimators. Our main findings hold and two features of our results standout: first, that COVID-19 hurt international trade more for non-Asian countries; and second, that sectoral sensitivity to COVID-19 was heterogenous. These results have important policy implications.