Crisis after crisis: Is International Trade dying
Over the past five years, global trade has undergone a dramatic transformation under the influence of a series of economic and geopolitical shocks. From the COVID-19 pandemic and the largest decline in exports since 2009 to armed conflicts and a new wave of protectionism, all these factors have led to a significant change in both the volume and direction of international trade flows, which indicates the long—term nature of the ongoing "reconfiguration of the global map." Whether there will be a restoration to the previous order, how Russian foreign trade has changed and whether the formation of new economic blocs is possible was discussed at the webinar of the rating agency Expert RA.
The endless crisis
As noted in the agency's report, one of the most noticeable consequences of the pandemic since 2020 has been the aggravation of logistical problems and the disruption of global supply chains. Violations caused first by sanitary restrictions in major ports (for example, in Shanghai and Los Angeles), and then by man-made and natural disasters (the accident of the container ship Ever Given in the Suez Canal in 2021, the drought in the Panama Canal in 2023-2024) and the geopolitical crisis in the Red Sea (2023-2025), led to an increase in the volatility of freight rates and the forced lengthening of routes, in particular through the Cape of Good Hope. Geopolitical factors also provoked the closure of airspace and a decrease in container traffic to a number of regions, which, in turn, intensified the development of alternative transport corridors, for example, the Middle Corridor bypassing Russia.
After the fall in 2020, goods trade experienced rapid recovery growth in 2021-2022, driven by the lifting of restrictions and pent-up demand. However, already in 2023-2024, the growth rate slowed down amid the continued increase in sanctions pressure and new protectionist policies, although a slight recovery was again noted at the beginning of 2025. At the same time, there was a steady trend towards the growth of e-commerce, the volume of which in retail grew three times faster than the volume of face-to-face trade. The service sector, which was more affected by the pandemic, showed a maximum decline in 2020, but recovered at a faster pace than commodity trade in 2021-2022. An important change was the increase in the share of online services provided.
The geopolitical tensions following the start of the CBO in 2022 have become a catalyst for a large-scale reorientation of trade flows, especially in the energy and raw materials sectors. As a result of the sanctions, EU countries sharply reduced fuel imports from Russia, which led to an increase in the share of the United States, Qatar and other countries in their energy mix. Russia, in turn, redirected exports of mineral resources and metals, increasing supplies to China, India and Turkey many times over.
A similar pattern is observed in the electronics trade: China's share in Russian imports of electronic goods has increased sharply, while the share of EU countries has almost disappeared. In agriculture, despite the preservation of key exporters (USA, Russia, Ukraine), there were also changes in the directions: The United States reduced grain exports to China, while Russian grain supplies experienced growth in 2022-2023 and a decline in 2024.
Special attention should be paid to the new protectionist policy of the United States, which began in 2025 with the introduction of a universal tariff of 10% and numerous additional duties, bringing the average applicable import tariff to 19%. This led to a new round of trade war with China, where duties peaked, and also provoked retaliatory measures from other major economies, including the EU and Canada. This fragmentation of trade is expected to have a negative impact on developing countries, slowing down their industrialization, and forcing large exporters facing high tariffs to actively diversify their trade routes. Thus, the global trading system is entering an era of increased volatility, long-term logistical changes and the formation of new trading blocks.
"We confuse the tracks in order to sell something"
If we talk about Russian trade relations, then, as Peter Grishin, head of the Department of Macroeconomic Analysis and Debt Markets at Euler Analytical Technologies, noted, it's not only about the physical change in export-import flows, but also that we have lost all confidence that foreign trade statistics mean something.
— We live in a country that, for forced reasons, is a champion in foreign trade balancing (what kind of product it is, what country of origin it has, where and from where it goes, etc.). We have been trying for three years to restore the real picture of trade statistics — it is now closed in Russia — in a mirror image through data from partner countries. We are trying to track down who is the real buyer of our goods from the news, tanker traffic, and other sources. You get very different pictures depending on which layer of information you stop at.
According to him, the most important difference between the current state of affairs and what it was before 2022 is that foreign trade in general and ours in particular used to be very well regarded. For example, the economics of oil exports were calculated with an accuracy of three cents.
— All this happened consciously — any normal person, if they choose "to trade, but it's unclear" and "not to trade at all", will make the same choice that we did. In navigation, a "flag of convenience" is used, and in trade there will be a geography that has nothing to do with us. Countries that obviously won't be able to consume even a small fraction of what we've sold them. This is an inevitable reaction to the sanctions pressure — we confuse our tracks in order to sell something, and it's not a bad sell.
It is worth noting that similar processes are taking place in trade between third countries. Various "gaskets" are beginning to perform more and more functions — against the background of high tariffs, their use becomes justified. For example, in the US-China trade.
The foreign exchange market is empty
Grishin also noted that the entanglement of supply chains leads to an increase in working capital, as well as the loss of importance of the foreign exchange market and current exchange rates.
— Previously, companies were given trade credits and they could pay after receiving the goods. It's all in the past now. It doesn't matter how you pay.: in the old way, directly or through payment agents, money is always in advance. You need to pay first, and only then will the product arrive. It follows that the connection between foreign trade and the exchange rate has become completely illusory. Right now, a deal, even for non—sanctioned goods, takes many months - I have to buy foreign currency in October so that something comes to me in March. Previously, we had a clear market: an export ruble meant a ruble of the currency sold, an import ruble meant the currency bought. Where sales agents work, this is in fact barter, which makes the work of the foreign exchange market meaningless, whereas the exchange rate is set in a circle of transactions ten times less than the one that needs to be taken into account. According to our estimates, a third of imports now come for money, and the rest goes through sales agents," the analyst states.
There will be no severance of ties
Interestingly, despite all the upheavals, the physical volume of commodity flows has not decreased too much.
"Currently, duties on Chinese imports to the United States are about 50%," explained Olga Biryukova, senior researcher at the Faculty of World Economy and World Politics at the National Research University Higher School of Economics. — This has not happened in recent decades, it is an anomaly. This phenomenon will reduce the volume of Chinese trade flows to the United States. The strongest response from China is the application of export control measures, in particular, for rare earth metals. All this will be quite sensitive for the United States. But if you look at the statistics on China's exports, including the latest ones for the second quarter of this year, then the volume of supplies has not dropped. Exports to the United States fell, but exports to Asian countries increased. There was no failure of global trade, despite the tariffs.
Biryukova believes that there will be no complete severance of trade ties between the major powers.
— There will be attempts to separate themselves and form their own trading blocs, but the world's largest economies are too interconnected — economically, investably, and even technologically.
According to her, the current situation with the Sino-American trade war entails risks for Russia and other EAEU countries.
— In general, China now provides a third of the bloc's trade. Imagine: the market for China is narrowing, you need to sell these products somewhere, and here Russia is at hand. Therefore, if we want to preserve our industry, we need to build a comprehensive import policy — where there are risks to national production, we need to limit imports. We are not talking about the fact that we are uncompetitive: now, in comparison with the Chinese industry, absolutely everyone is uncompetitive, given the scale of state support for the industry from the Chinese government.
Biryukova notes that trade agreements alone are not enough to form economic blocs, and industrial and technological chains must be reassembled.
— It is difficult to achieve this. Many developed countries that have claimed to create "sustainable supply chains" (meaning the countries they are friends with) have similar export baskets. It is doubtful that such a friendship will lead to industrial development.
The patient is probably dead.
The expert also noted a significant degradation of the WTO's role, although the organization continues to exist. In a situation of global trade conflicts, she was supposed to act as an arbitrator, but turned out to be useless in the new environment: "the patient is more likely dead than alive." Its main function has become to provide a platform for consultations and negotiations at the professional level.
— Most of its functions are currently not viable. The judicial system doesn't work, and neither does the political one. The organization's level of importance has dropped since Trump's first term. At that time, they almost did not withdraw from it — that's how one can characterize the US participation in the WTO during those periods. What remains? Monitoring and, to some extent, negotiation functions remain. De facto, negotiations are still taking place in club formats. And for many developing countries, this is interesting, because developments in the field of trade policy are being born there, which can then be seen at the regional level," Olga Biryukova concluded.
Переведено сервисом «Яндекс Переводчик»
