COVID-19 CHANGED
1 HOW
GLOBAL TRADE FOREVER
TRADE RELATIONSHIPS & TARIFFS
2 HOW
ARE AFFECTING TRADE WORLDWIDE

3 DIGITALISATION ON TRADE
THE IMPACT OF

DE-GLOBALISATION – A NEW WAY

4 TO TRADE BUT WILL IT STICK?

From crisis to opportunity:what’s the future of trade?

How trade
relationships &tariffs are affecting
trade worldwide

March 2021

2

COVID-19 CHANGED
1 HOW
GLOBAL TRADE FOREVER

TRADE RELATIONSHIPS & TARIFFS
2 HOW
ARE AFFECTING TRADE WORLDWIDE

3 DIGITALISATION ON TRADE
THE IMPACT OF

DE-GLOBALISATION – A NEW WAY

4 TO TRADE BUT WILL IT STICK?

Before the pandemic
hit, the biggest risk wasa possible escalation of
the trade war between
the United States andChina. How the epidemicchanged those concerns.
Andreas Tesch

Audience Q&A
Is it too early to tell the impact of Brexit?
I love to predict everything. But yes, it’s too early and it’s hidden.
Even econometricians, not normal humans, can’t tell between
what is the result of the pandemic and what is the result of Brexit.
John Hulsman

Audience Q&A

2

How are relationships between the UK and rest of the world,
now that it has left the European Union?
Businesses should really try and find their way around the EU transition.
I do appreciate that there have been so many new rules that it’s beenquite difficult to do business and it business has taken a bit of a knock.
Lesley Batchelor

HOW TRADE RELATIONSHIPS & TARIFFS ARE AFFECTING TRADE WORLDWIDEHow trade relationships & tariffs
are affecting trade worldwide
Last month, in the Atradius Economic
Outlook, Atradius economists predicted
a rebound for the global economy.
They said that by the end of 2021 the global economy (taken
as a whole) will have returned to year end 2019 GDP levels.
However, they cautioned that this prediction was built
on seven interrelated key assumptions. Several of theseconcern the global pandemic, including the assumptions
that the virus will be contained, vaccines will become widely
available and government fiscal support packages will
be withdrawn slowly. In addition they also identified theimportance of state monetary policies, investor sentimentand government measures to minimise business insolvencies.
Finally, they singled out the trade tensions between the US
and China and the importance of a reduction in trade policy
uncertainty to spur the recovery in the global economy.
Given the importance of cross-border trade relationships
for the global economy we invited a political strategist,
John Hulsman, a business export specialist, Lesley Batchelor,and a trading risk expert, Gordon Cessford, together todiscuss how trade relationships and tariffs are affecting
trade worldwide. This white paper captures the main points
discussed during the live panel webinar. However, the viewsof John Hulsman and Lesley Batchelor do not necessarilyreflect the views of Atradius. Any observations or reflections
shared during the webinar and captured in this white paper
should not be taken as Atradius insight or advice.
As part of the series From crisis to opportunity: what’s the
future of trade?, this webinar, How trade relationships andtariffs are affecting trade worldwide was introduced by
Atradius CMO, Andreas Tesch and moderated by journalist,
Daisy McAndrew. It featured John Hulsman, President ofJohn C. Hulsman Enterprises, Lesley Batchelor, Director of
Export Boot Camps, and Gordon Cessford, Regional Director
for Atradius in North America.

Key themes
Tariffs and trade opportunities under Biden
What will global relationships look like under the Biden
presidency? Will US-China trade tensions continue?
COVID-19 vaccine trade wars
The EU, USA and India are exploring banning vaccine
exports. What does this mean for vaccine distribution?
Will the new head of the WTO take it in a new direction?
Ngozi Okonjo-Iweala is the new Director General of
the WTO. What can we expect from her leadership?
Regional approaches to trade relationships and tariffs
What are the fundamental issues – and any parallels,facing businesses in different regions?
Global protectionism: what to look out for
What are the top three areas concerning trade relationships
and tariffs that business should be aware of?
Political risk vs opportunity
How can businesses build strategies to manage andminimise political risk?

Audience Q&A
We are an SME with a small team.
Do you have any export tips?
Tap into those people who are able to support you
and give you advice, who are able to guide you in
the right direction, so that you don’t waste time or yourscarce resources, but hone in on the right opportunity.
Gordon Cessford

Audience Poll #1
TO WHAT EXTENT HAVE CHANGES IN
INTERNATIONAL TARIFFS AND BORDER CONTROLSOVER THE PAST 12 MONTHS IMPACTEDYOUR BUSINESS GROWTH STRATEGY?

14%

40%

40%

6%

NOT AT ALL

N/A – I DON’T EXPORTSOMEWHATSIGNIFICANTLY3
HOW TRADE RELATIONSHIPS & TARIFFS ARE AFFECTING TRADE WORLDWIDE

What difference will President Biden’s election
make to US-China trade relations?
Prior to the US presidential elections in November 2020,
tensions between President Trump and China had become
increasingly heated, with many examples of tit for tat tariffs.
So when Donald Trump failed in his bid to get re-electedmany commentators expressed the possibility of improved
relations between the two superpowers.
However, for geopolitical strategist John Hulsman theelection of a new US president will not bring about greater
US-China free trade. He asserted that despite the Democrat
Joe Biden taking over from Republican Donald Trump,
he felt both presidents’ views on trade are similar enoughthat no significant change will be discernible.
Quoting from the Simon and Garfunkel lyrics to The Boxer
he said: “After changes upon changes, we are more or lessthe same.” He added that he believed Biden’s views on China
and trade in general were close enough to Trump’s views
that that the US position towards tariffs and relationships
would not change with the new administration.
John also maintained there is a tendency for the US
Democrat party to be protectionist. He said: “One forgets
that, historically, the Republican Party is the party of free
trade.” He added: “and you see the Democrats becoming
an increasingly protectionist party. You can see thisby them jettisoning the Comprehensive and Progressive
Trans Pacific Partnership CP-TPP.”

Our pre-event questions

WHICH OF THE FOLLOWINGREGIONAL TRADE AGREEMENTS
IMPACT YOUR BUSINESS?

We asked 4 questions in advance.
We wanted to take a quick snapshot of how
businesses around the world are approaching
tariffs and trade agreements. So, as part of theregistration process for this virtual event, we asked
attendees the following four (voluntary) questions.
OVERALL,
HOW HAVETARIFFS HAD
AN EFFECTON YOUR
BUSINESS?

VERYNEGATIVE

12%8%SLIGHTLYPOSITIVE

EUROPEAN FREE TRADE AGREEMENT

18%
USMCA

16%
TRANS-PACIFIC PARTNERSHIP

13%
43%

4

3%

STRONGLYPOSITIVE

77%

34%

SLIGHTLYNEGATIVE

HOW TRADE RELATIONSHIPS & TARIFFS ARE AFFECTING TRADE WORLDWIDENO EFFECTREGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP

2%OTHER, PLEASE SPECIFY: MERCOSUR

Does the new administration make life easierfor businesses exporting to the States?
We asked trade expert Lesley Batchelor what exportingto the US might be like for businesses on the ground.
She said: Business is business, isn’t it? So effectively,
I think it’s going to be more or less the same. We think that
Biden’s going to be a more acceptable face of protectionism.
This means he’ll actually tell us very nicely that he’s notgoing to do anything, whereas Trump was a bit more brutal.”
In addition to agreeing that Biden would be unlikely toremove tariffs, Lesley reminded the audience of the scaleand complexity of trading with the US.
She noted that in addition to its sheer size, its approach
to individual state laws and state taxes makes exportingto the USA a complex market to work with. She addedthat US-UK trade is currently working fairly well and she
did not see how a UK trade deal with the US would makemuch impact to the way businesses do business trade.

attractive to overseas buyers, and will support the US
export community. Reflecting on economic predictions
Gordon delivered a fairly positive outlook for trade. He
said that economists are expecting a fairly strong global
economic rebound in 2021. GDP is likely to recover by about
5%, following the 3.9% contraction last year. In addition,
trade is expected to rebound between 7% and 8% after asimilar contraction last year.
However, Gordon acknowledged that one the greatest risks
currently impacting trade relationships is the pandemic.
He said: “Business closures and supply chain disruption
continue to be concerning. We need to allow thosevaccination programmes to progress globally, not just in
the US. This will help us all find a way to return to a kindof normal in terms of trade and opportunities.”

Audience Q&A

How may the Biden presidency affect American businesses?
Atradius Regional Director of North America Gordon
Cessford used the analogy of a cocktail to describe hisperception of US business confidence following Biden’s
election. He said: “I liken it a little bit to a cocktail, witha few measures of positivity and a large dash of caveat.
So on the positive side, there is a feeling of calm here now,or at least of less uncertainty.” Gordon also drew attention
to the value of US currency and how it has a role to playin import/export trade. He noted that most commentators
expect the value of the dollar to decrease under Biden.
This in turn will mean US exports will become more

DURING PERIODS OF TARIFF UNCERTAINTY OR CHANGESIN REGIONAL TRADE PARTNERSHIPS, DOES YOUR BUSINESSALTER THE WAY IT APPROACHES BUDGET PLANNING?

Who has the upper hand in a trade war, the US or China?
The Chinese definitely have the better of it on the USChina competition route because they’re opening (while
the US retreats into protectionism). They’re the largest
trading partner of all the countries around them. And
in terms of Asia, all the future global growth is there.
However, politically, the US has the upper hand as therest of Asia moves towards the US over alarm at China’s
expansionist policies.
John Hulsman

12%
OTHER SPENDING REDUCTIONS OR DELAYS

9%OTHER SPENDING INCREASES OR INVESTMENTS

42%

27%

YES

NOT SURE

31%NOIF ‘YES’ TO THE ABOVE, WHAT WERE
THE MAIN CHANGES YOUR BUSINESS MADE?

21%
REDUCTION IN DISCRETIONARY SPENDING (TRAVEL BUDGETS, TRAINING ETC.)

21%

6%
REDUCTION IN PRICE OF PRODUCT OR SERVICE (EG TO INCREASE COMPETITIVENESS ETC.)3%
INVESTMENT IN CAPITAL EXPENDITURE

3%
GROWTH IN STAFF NUMBERS

3%

REDUCTION IN CAPITAL EXPENDITURE

REDUCTION IN STAFF NUMBERS

21%

0%

INCREASE IN PRICE OF PRODUCT OR SERVICE (EG TO COUNTERACT TARIFF COSTS ETC.)

INCREASE IN DISCRETIONARY SPENDING (TRAVEL BUDGETS, TRAINING ETC.)HOW TRADE RELATIONSHIPS & TARIFFS ARE AFFECTING TRADE WORLDWIDE

5

What is happening with the vaccine trade wars?
On the same day as the live Atradius webinar on trade and tariffs,
the 27 EU state leaders held a summit to discuss their COVID-19 vaccine strategy.
Prior to the summit some EU voices, including Presidentof the European Commission, Ursula von der Leyen, hadexpressed frustration that the EU was exporting vaccines
to the UK at a time when many member states wereexperiencing a third wave of the virus and the UK had notsent any vaccines to the EU. Indeed, the day before thevaccine summit, the Commission revised regulations inorder to allow the EU to introduce the principles ofreciprocity and proportionality into vaccine exports. In effect,
the EU now has the ability to deny vaccine export licences
to countries whose vaccines coverage is better than the EU.
After becoming heated in the days leading up to the summit,
the EU leaders cooled the rhetoric of a potential vaccine war
and reasserted their commitment to a pro-rata delivery of
vaccines to all EU countries.
John Hulsman agreed that this cooling of such an emotionallycharged topic was the right way forward for the EU.

Audience Q&A
What will a post-Angela Merkel world mean for trade
after her departure?
Huge respect for Angela Merkel, she’s absolutely incredible,
it’s going to be difficult and there’s going to be disruption.
We’ve just got to hope that her successor can step into
those big shoes.
Lesley Batchelor

6
HOW TRADE RELATIONSHIPS & TARIFFS ARE AFFECTING TRADE WORLDWIDE

He noted that vaccine supply chains are complex and include
elements of UK production. He said that any unravelling ofthese chains could be potentially damaging to the vaccine
programmes of individual countries. He also acknowledged
the potential for vaccine trade wars is not limited to the EU.
He said: “The Indians are now holding vaccine shipments
as we speak. So this could all get out of hand. And theAmericans are using emergency measures to stop the exportof vaccines, or to limit them to the USMCA (US, Mexico,
Canada) countries.”
Lesley Batchelor asserted that different countries will needto collaborate with each other over vaccine distribution.
She said that the politicians “seem to be moving a little closer
to having a proper understanding of the fact that we are all
going to have to cooperate.”

Will the new head of the WTO take it in a new direction?
The World Trade Organization (WTO) appointed a new
Director-General on 1 March 2021. Ngozi Okonjo-Iweala isa global finance expert, an economist and Nigeria’s former
Finance Minister. Commenting on Dr Okonjo-Iweala’s
appointment, Lesley Batchelor said that she was looking
forward to the WTO working on globalisation and saw thisas a good thing. She added that the WTO has brought us
the general system of preferences and noted this has helped
smaller, less developed countries trade on a more evenplaying field.
Lesley pointed out that the former US President Trump had
previously developed a strained relationship with the WTO
and she felt this would not be the case with President Biden.
She said: “I think the WTO has struggled under attack from
Trump’s administration. I don’t think Trump liked the ideathat every country had an equal say.”John Hulsman echoed Lesley’s point and said:“Trump did not like the idea of the WTO in terms of American
nationalism as a philosophy of anything superseding thesovereignty of the United States in any way. He was out to
get it, render it ineffective. There’s no doubt about that at all.”He added: “Biden is not like that. Biden will be generally
in favour of things like the WHO. Biden will be in favour of
repaying some of the UN dues. Biden will be in favour ofseeing the WTO has enough members that it can do things.
And so to that level, Biden will be a very different animal
from Trump.”

We’re looking forward to the WTO
working on globalisation asa good thing. It has brought us
the general system of preferences,where smaller, less developed
countries are actually helped to
trade on a more even playing field.
Lesley Batchelor

HOW TRADE RELATIONSHIPS & TARIFFS ARE AFFECTING TRADE WORLDWIDE

7

How do attitudes to trade vary between different regions
and how can businesses use that information?
Gordon Cessford has lived and worked in some of theworld’s major trading regions, including Europe, Asia andthe Americas. His experience has made him well-placed
to comment on regional variations. He said: “I’m a firm
believer that actually, wherever you are in the world,whichever geography you operate in, the fundamentals
and building blocks of trade are the same. These include
conducting your due diligence, being prudent in yourrisk management, being open and communicative withcustomers, with clients, etc.”
Gordon also noted that many markets around the world are
currently undergoing changes and evolutions. He picked up
on the trend that although China has always been known
as a big exporter, more recently they have been beginningto move away from that export-orientated investment
towards more a consumption-led domestic approach. This
will impact supply and demand, and may make the country
more shock resistant to what’s going on outside of China.
He added: “Obviously tariffs remain, so it will be interesting
to see how the relationship develops between the US and

8
HOW TRADE RELATIONSHIPS & TARIFFS ARE AFFECTING TRADE WORLDWIDE

Audience Q&A
What is your advice for exporting to Asia?
It’s important to remember that Asia is not a homogenous
market. It’s a complex jigsaw of countries with different
cultures, different languages, different legal systems andregulatory environments, etc. And so you’ve got to do yourhomework and get advice from export councils, consulates,
embassies or trade missions, and have good local partners.
Gordon Cessford

China post-Trump. Around the world we’ve got the different
trade agreements, USMCA, CP-TPP, and RCEP (the Regional
Comprehensive Economic Partnership). Businesses tend
to be pretty pragmatic when it comes to trade and tariffs.
What they all strive for, though, is the opportunity to growand the opportunity to trade securely.”Trade is trade, but can cultural issues get in the way?
Lesley Batchelor agreed with Gordon Cessford that mostbusinesses know what they are doing and practise due
diligence when developing trading relationships. However
she did acknowledge that the biggest mistake businesses
make is to fail to prepare properly. She said: “Things like
intellectual property are areas where businesses have to
make a really big decision. Are you going to keep your IP
secret and keep it all to yourself to protect it against being
copied? We always used to say, well, if you really want tokeep it secret, put it under your bed, and don’t let anybody
see it. But of course, that’s not really going to help you if
you want to sell things and make money.”

they are rarely the only cost associated with exporting
and urged businesses to look into possible local taxes too.
John Hulsman described most trade agreements as “geostrategic moves”. He recognised that deals such as the RCEP
and the CP-TPP may have some political value, but feltthat they would not impact most businesses on the ground.

If you’re trading witha country, you don’t often
go to war with them.

She also cautioned that although tariffs can impact on
the price that you can charge for your product in a market,

Lesley Batchelor

Audience Poll #2
HAS YOUR BUSINESS CHANGED
THE WAY IT APPROACHESIMPORTS AND EXPORTS DUE TOREGIONAL TRADE AGREEMENTS?

48%

20% 24% 8%

N/A – I DON’T EXPORTNOT AT ALL

SOMEWHAT SIGNIFICANTLY9HOW TRADE RELATIONSHIPS & TARIFFS ARE AFFECTING TRADE WORLDWIDE

What areas concerning trade and tariffs
should businesses be most aware of?
In terms of areas to be aware of, John suggested his
prediction about Biden’s protectionist stance would be wrong
if the US is seen to engage in some trade agreements. He said:“I’ll be wrong in the assessments I made about protectionism,
and about Biden, if and when there’s movement on TTIP or
the CP-TPP, or the US-China tariffs begin to be relaxed. If anyof those three big pieces move, then you have to question theentire understanding of what I said.”

One forgets that, historically, the Republican Party
is the party of free trade. And you see the Democrats
becoming an increasingly protectionist party.
John Hulsman

10
HOW TRADE RELATIONSHIPS & TARIFFS ARE AFFECTING TRADE WORLDWIDE

Audience Q&A
Will Donald Trump run for anotherterm as president of the USA?
If he isn’t indicted, and if hishealth is good, I think he’ll try
again. And the danger for theRepublican Party is he can win thenomination, but he can’t be electedpresident. After the insurrection,
the numbers are clear that he lost
independents forever. What theywant is Trumpism, without Trump.
Some of the disruption, some ofthe populism, but him to go away.
John Hulsman

How can business mitigate
political trading risks?
Gordon Cessford acknowledged that political risks andindeed all trading risks are issues that he and his colleagues
at Atradius consider, assess and work to mitigate forbusinesses every day. He explained: “I’m going to borrow
part of a John Allen Paulos quote which is, “uncertainty is
the only certainty there is.” He cited the rapid change froma potential US-China trade war to the global pandemic as
example of how external events can impact businesses andcan cause unexpected disruption.

It’s about that ongoing assessment of the supply chain,your customer supply chain, plan and strategise about what
happens. If something goes wrong, what’s that continuity
plan? Then from a mitigation perspective, obviously,
we have tools available, credit insurance is one of them,allowing companies really to take those risks in a safe andsecure way, and at least remove some of that uncertainty.”

He said that the best way businesses can protect themselves
against uncertainty is to have robust risk management
processes, including credit management and the agility
to be able to quickly respond to crises and to opportunities.
Gordon explained that risk management procedures follow
a three-step process. “Step one: understand the risks. Step
two: manage the risks. Step three: mitigate if necessary.”
He suggested that information from political risk experts
such as John Hulsman may form part of step one.
He said: “If I look at some of the things that John is saying,that’s great macro economic environment information
to have at hand when making decisions when exportingor importing or doing business. Then of course, you dig
further down into your business to look at the dynamics
of your own market and your products or services. And
then down into the next level, which is very much where
Atradius works, to look at the credit risk of the customer,
the buyer. Know your customer, KYC. This is somethingthat banks have been doing for many years. And it’s really
important for corporates to also be doing the same. In
addition, it is important to say it’s not just at the beginningof a relationship.

Audience Q&A
What capacity is left within governments to continue
pandemic trade and economic support?
Many governments delivered fiscal support and in somecases even amended bankruptcy laws. But I think wewill now start to see these withdrawn. So we may see
an uptick in corporate insolvency of up to as much as
26% in 2021. That’s a big uptick, because actually, what
the surprise was in 2020, was that so many businesses
survived the economic downturn. So we will see achange there this year.
Gordon Cessford

11
HOW TRADE RELATIONSHIPS & TARIFFS ARE AFFECTING TRADE WORLDWIDE

If you’ve found this whitepaper useful, why not visit our
website www.atradius.com, where you’ll find many more
Atradius publications focusing on the global economy,
including country reports, industry analysis, advice on
credit management and essays on current business issues.
This paper captures the views of the webcast’s virtual panel
and is not necessarily a reflection of the views of Atradius.
Visit the Atradius YouTube channel to access a summary
version of the webinar.

COVID-19 CHANGED
1 HOW
GLOBAL TRADE FOREVER
TRADE RELATIONSHIPS & TARIFFS
2 HOW
ARE AFFECTING TRADE WORLDWIDE

3 DIGITALISATION ON TRADE
THE IMPACT OF

DE-GLOBALISATION – A NEW WAY

4 TO TRADE BUT WILL IT STICK?

Andreas Tesch
Atradius CMO
Daisy McAndrew
Moderator / Journalist
John Hulsman
President of John C. Hulsman Enterprises
Lesley Batchelor OBE
Director of Export Boot Camps
Gordon Cessford
Regional Director for Atradiusin North America

Connect with
Atradius on social media
youtube.com/user/atradiusgrouplinkedin.com/company/atradius
twitter.com/atradius

Copyright © Atradius N.V. 2021
Disclaimer: This report is provided for information purposes only and is not intended as investment advice,legal advice or as a recommendation as to particular transactions, investments or strategies to any reader.
Readers must make their own independent decisions, commercial or otherwise, regarding the information
provided. While we have made every attempt to ensure that the information contained in this report has
been obtained from reliable sources, Atradius is not responsible for any errors or omissions, or for the results
obtained from the use of this information. All information in this report is provided ’as is’, with no guaranteeof completeness, accuracy, and timeliness or of the results obtained from its use, and without warrantyof any kind, express or implied. In no event will Atradius, its related partnerships or corporations, or thepartners, agents or employees thereof, be liable to you or anyone else for any decision made or action taken
in reliance on the information in this report or for any consequential, special or similar damages, evenif advised of the possibility of such damages. Sources include: Event panellists and Atradius economists.

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