By Fangfei Dong & Brian Peck
Coronavirus
As the coronavirus pandemic scourges through countries around the world, governments are imposing lockdowns on their citizens and shutting down a wide swath of commercial sectors and businesses to stop the spread of Covid-19. These draconian steps are putting a massive crimp on the affected countries’ economic stability and gross domestic product (GDP) for at least several months to come. The global economy is now is in stagnation, which is also having a far-reaching impact on the different aspects of international trade. What are the significant changes happening to trade now that will also have an impact on economic recovery after the pandemic? We picked the following current developments as being significant to highlight the pandemic’s widespread impact on trade.
Global Supply Chain:
The world’s supply chains are facing a root-to-branch shutdown unlike any seen in modern peacetime as efforts to contain the coronavirus outbreak hit factories around the world, from developing countries to developed countries. In the last few days, a supply chain crisis that began earlier this year with Chinese factories has spread into key industries elsewhere that had – until now, weathered the impact. The shutdowns are contributing to the growing conviction that the world has slipped into its first recession since the financial crisis more than a decade ago. For example, Apple’s key suppliers which are spread out in China and Malaysia have been impacted by the pandemic. Due to the virus, factories in China had to shut down for some time, which directly led to other distributers having to minimize or even shut down their distribution. In Malaysia, key suppliers like Murata Manufacturing Co., Renesas Electronics Corp. and Ibiden Co. have halted production as a result of restrictions on the movement of goods imposed by the government. The above examples are an illustration of the harm that is happening to supply chains at all different levels.
Tariffs:
Due to the coronavirus, Americans for Free Trade, a group of more than 160 business associations, has urged Trump to consider providing relief from duties as one of the emergency measures his administration is continuing to roll out. Trump has imposed tariffs on a total of more than $400 billion in goods from China and the EU, ranging from Chinese apparel imports to European aircraft. In response to this public health crisis, USTR has already begun to exempt over 10 categories of medical products to confront the medical products supply shortage that currently exists in the US. At the same time, as this crisis is also causing more harm to the U.S. economy, producers and consumers, USTR has also issued tariff exemptions for Apple’s watches and a range of other products other than medical supplies subject to the section 301 tariffs imposed on Chinese imports.

Export Controls:
A growing number of export bans on medical goods and devices is exacerbating the challenges for medical professionals worldwide who are scrambling to find more face masks, ventilators and other life-saving equipment needed to fight the coronavirus pandemic. Some two dozen nations — including China and India — have begun to restrict or ban exports of medical gear such as masks, gloves, protective suits and disinfectant. A key player has also joined the fray – the European Union, the world’s largest trading bloc, imposed a prohibition on the export of certain medical supplies to prevent them from going outside the 27-nation union.
Services Decline:
US commercial air traffic is expected to drop by as much as 8.9% this year and hotels suffered a 12% year-over-year drop in revenue per available room during the first week of March. The current extensive travel bans imposed by several countries and the longer-term impact of a global downturn could exacerbate these declines and spread to other services industries ranging from financial services to construction. The growth of global trade in services was already on a precarious course before the coronavirus hit.
Brexit:
To date, Prime Minister Boris Johnson has dismissed the growing calls to seek an extension for the negotiating period for a new trade deal with the EU that Britain entered into after leaving the EU trading bloc on Jan. 31. If the two sides can’t reach a deal on their future partnership by the end of this year, the U.K.’s trade with the EU would be subject to restrictive tariffs and quotas which would further batter the U.K.s economy. Recently, the coronavirus has struck at the heart of the post-Brexit trade talks between Britain and the European Union, with both sides’ top negotiators testing positive for the virus. As a result, the second round of face-to-face talks on the future trade agreement were postponed on March 18th and have yet to be rescheduled.
About the Authors:
Brian Peck is the director of the USC Center for Transnational Law and Business. He also teaches international trade law and policy, global regulatory compliance and international IP law.
In 2013, Peck was appointed by California Gov. Edmund G. Brown, Jr., to serve as deputy director in charge of international affairs and business development for the Governor’s Office. In this capacity, he negotiated bilateral trade and investment MOUs between the state of California and Mexico, Japan and Chinese subnational governments.
He served as senior director for intellectual property, and director of Japanese affairs at the Office of the United States Trade Representative. He was the lead negotiator for the IP chapters in the U.S.-Colombia, U.S.-Peru and U.S.-Panama FTAs, and led the U.S. delegation at the WTO TRIPS Council meetings. He also co-chaired the U.S.-Japan IT Working Group, and worked on regulatory reform initiatives for Japan’s IP rights legal regime, IT, e-commerce and telecommunication sectors. He also led bilateral talks with several Asian countries at the WTO under the Doha Development Agenda negotiations to liberalize market access for trade in services.
Peck was an attorney-advisor at the U.S. Department of Commerce, where he participated in a number of antidumping and countervailing duty cases, including litigation before the U.S. Court of International Trade as well as NAFTA and WTO dispute settlement panels.
He received his law degree, cum laude, from the University of San Diego School of Law and his BA degree from UC Berkeley.

Fangfei Dong is the associate director for policy, research and programs at the USC Center for Transnational Law and Business. She brings international trade policy development and analysis expertise, as well as international trade and transnational business experience in the private sector.In her role, Dong conducts research and policy analysis related to international trade, with a particular focus on issues related to the WTO multilateral system, U.S. trade policy, China’s trade policy, the harmonization of regulatory regimes and standards, the use of non-tariff barriers as protectionist measures, global regulatory compliance and market access.Previously, she worked for Underwriter Laboratories (UL), a global safety consulting and certification company, where she oversaw Chinese suppliers’ compliance with UL safety standards necessary to export. Before her work at UL, she worked for a Japanese policy consulting firm. Her responsibilities included: consulting clients on the process of applying for mandatory CFDA (China Food and Drug Administration) national certifications for exports to China, conducting several research programs, and implementing compliance programs for licensing and product standards for the export of various products to China and Europe.She earned her MA degree in International Public Policy and Management at the USC Sol Price School of Public Policy, and a BS degree in public policy from East China University of Political Science and Law.