Impact of Coronavirus in international Trade
Coronavirus was declared a global pandemic by the World Health Organization. Its outbreak has disrupted international Trade through the supply chain and manufacturing operations around the world. The pandemic has prompted companies, industries, and businesses to close. Most of the companies are being forced to shut down; for example, those companies relying on manufacturing materials in China. In essence, the majority of companies have indicated a decrease in production in the past months (Haren & Levi,2020). The aspect of China being one of the largest economies in the world has prompted an assortment of global markets to shut down. For example, most of the tech industries rely on China labor to build phones and computer chips, and most of these industries are running low in terms of production.
To be specific, America’s companies conducting their business operations in China are suffering from losses and financial crisis due to ongoing coronavirus pandemic specifically in China. Specifically, this caused an implication in the reduction of the flow of goods to the outside world. Apparently, the American firms located in China are experiencing a shortage of workers even after officially reopening.
Precisely, the COVID-19 pandemic has affected one of the giant companies in the United States, the Apple company whose sites are operating in China. The company lately revealed that its business had been affected by COVID-19 direly. The company reduced its sales in the market to make its product prices favorable (Haren & Levi,2020). Besides, the impact of COVID-19 has been a reduction in supply chain materials on the technological and manufacturing company. Don't use plagiarised sources.Get your custom essay just from $11/page
It has been quite evident that the coronavirus disease has turned out to be a threat to the economy globally. The majority of the potential markets have been closed, leading to company closure. Through the utilization of documentary analysis, the majority of scholars have proven that COVID-19 will take a considerable duration for scientists to discover its cure. The virus has caused tension in the trade markets. Since the disease was first diagnosed in China, it has claimed multiple individual lives hence hindering the element of economic progression.
In regards to the technology giant Apple company, it deals with the production of various technological devices such as the renowned mobile phone brand, iPhone. Specifically, the iPhone makers are dependent on Chinese factories to provide them with raw materials (Wakabayashi,2020). The company recently stated that its supply of smartphones would reduce because of the slower production of materials by Chinese companies. Apple closed all its stores in China and around the world due to a lack of materials. Apparently, the disease has affected the trading between China factories and the USA Apple firm in the supply of raw materials. Even after all factories making the iPhone in China speed up production, Apple will still face some challenges. For example, it relies on Chinese suppliers to provide raw material for its devices. Therefore, all those supplies made by these factories must pass through the Government inspection facilities to ensure they are free from COVID-19 infections.
Most of the factories are resuming their work in China, but many global markets remain closed; for example, the United States. Therefore, China is limited to exporting or importing the product. For instance, COVID-19 has caused the slow production of Apple products in China. According to the Chinese government, Apple shipped less than 500,000 iPhones in February, recording a 60% decline (Soergel,2020). Most of the companies across the world are fearing that, if there are no measures to contain COVID-19, their business will shut down. China has become an intermediate supplier for manufacturing companies in the world, and about 20% of manufacturing products originate from China.
Besides, the four dominant tech companies, Microsoft, Amazon, Alphabet, and Facebook companies, have lost $1.3 billion in the market due to the spread of Coronavirus (Levi,2020). The COVID-19 continues to threaten the global economy because there are no markets currently for these products. For instance, China issued a lockdown in the country, which reduced the movement of people and the closing of the companies. Apple company target China has its biggest consumers; the lockdown has affected the company production. The company experienced a decline in the number of iPhones due to a lack of markets and the closure of international borders because most of its trade partners feared the transmission of COVID-19. The outside market is experiencing a shortage of electronic products such as smartphones and computers due to the closure of tech companies in China.
In conclusion, as long as the pandemic remains as a global, majority of companies and organizations are anticipated to experience multiple predicaments majority of them prompting a significant decline of the diverse national economic conditions. Miserably, the virus has disrupted the majority of the businesses and companies globally, for instance, the Apple company. The company has experienced financial crises and low production of commodities in regards to the abrupt closure of the international markets. Apple being one of the largest tech companies in the world, with the highest number of its consumers in China, is seriously expected to experience quite a lot of predicaments for the reason that the plight will take a prolonged duration prior to the medical personnel discovering its cure. Some of the pickles include the following:
- Significance drops in foreign exchange levels
- Shortage of raw materials for manufacturing companies.
It is reasonably essential that businesses come to the realization as soon as possible that this menace will solemnly affect them. They ought to establish measures envisioning the manner of their daily operations.
References
Haren, P., & Levi, D. (2020). How Coronavirus Could Impact the Global Supply Chain by Mid-March. Retrieved from: https://hbr.org/2020/02/how-coronavirus-could-impact-the-global-supply-chain-by-mid-march
Levi, A. (2020). Tech’s big five lost $1.3 trillion in value since the market peak one month ago. Retrieved from: https://www.cnbc.com/2020/03/19/techs-big-five-lost-1-trillion-in-market-value-in-past-month.html
Soergel, A. (2020). The Economic Cost of the Coronavirus. Retrieved from: https://www.usnews.com/news/the-report/articles/2020-02-21/the-economic-cost-of-the-coronavirus
Wakabayashi, D. (2020). Apple Signals Coronavirus’s Threat to Global Businesses. Retrieved from: https://www.nytimes.com/2020/02/17/technology/apple-coronavirus-economy.html