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The Trade Numerologist: The Optimistic Case for Global Trade

23 April 2018

We've spent a lot of time in this space of late talking about tariffs, protectionism, the weakening of trade deals and the World Trade Organization, as risks to the global economy.

But while a trade war, particularly between the US and China, remains a potential challenge, it also obscures a lot that is still going right these days for shipping lines, ports, logistics firms and manufacturers with global supply chains.

Consider this: In 2017, total global trade increased to $16.7 trillion, up 9.8% from 2016, when it was $15.3 trillion, according to the IHS Markit Global Trade Atlas.

All the 2017 customs data has been reported, and is now available in the Global Trade Atlas, so we can also take a look at which countries are rising and falling in the battle for global markets and opportunity.

Top 20 exporters, 2017 (Pct. change vs. 2016)

  • China $2.28 trillion (+7%)
  • US $1.55 trillion (+7%)
  • Germany $1.45 trillion (+9%)
  • Japan $698 billion (+8%)
  • Netherlands $652 billion (+14%)
  • Hong Kong $550 billion (+6%)
  • France $535 billion (+7%)
  • South Korea $574 billion (+16%)
  • Italy $506 billion (+10%)
  • UK $446 billion (+6%)
  • Belgium $430 billion (+8%)
  • Canada $421 billion (+8%)
  • Mexico $409 billion (+10%)
  • Singapore $373 billion (+13%)
  • Russia $357 billion (+25%)
  • Spain $320 billion (+10%)
  • Switzerland $299 billion (-1%)
  • India $297 billion (+12%)
  • Taiwan $292 billion (+14%)
  • Thailand $236 billion (+10%)

Among the top exporters, Russia (+25%), South Korea (+16%), Netherlands (+14%) and Singapore (+13%) had the biggest increases in 2017. Russia benefitted from increases in demand and prices for oil and gas, as its fuel exports rose 28% to $173.3 billion from $134.9 billion. In particular, Moscow has been forging tighter trade links with China, while continuing to export massively to the European Union.

Top destinations for Russian exports, 2017

  • China $38.9 billion
  • Netherlands $35.6 billion
  • Germany $25.7 billion
  • Belarus $18.4 billion
  • Turkey $18.2 billion
  • Italy $13.8 billion
  • South Korea $12.3 billion
  • Kazakhstan $12.3 billion
  • Poland $11.6 billion
  • US $10.7 billion

South Korea was helped by rising demand for its cars, TVs and electronics, while Singapore and the Netherlands benefitted from the strength of the global trade.

Looking at the long-term trends, it's remarkable how little has changed, except for the rise of China. Since 2000, it's climbed to first from seventh. South Korea has replaced Canada in the top ten. Otherwise, nine of the ten countries in the top ten are still the same as in 2000.

Top 20 exporters, 2000

  • US $780.4 billion
  • Germany $549.9 billion
  • Japan $479 billion
  • France $326.5 billion
  • UK $284.4 billion
  • Canada $278 billion
  • China $249.2 billion
  • Italy $239.7 billion
  • Netherlands $232 billion
  • Hong Kong $202.7 billion
  • Belgium $187.8 billion
  • South Korea $172.3 billion
  • Mexico $166.4 billion
  • Taiwan $147.6 billion
  • Singapore $137.7 billion
  • Spain $114.9 billion
  • Malaysia $98.2 billion
  • Russia $87.7 billion
  • Sweden $86.8 billion
  • Switzerland $80.4 billion

The world's biggest exporters are also its largest economies, but the list of top exporters includes smaller nations, like Netherlands, Belgium or Singapore. Their prosperity is another sign of the robust health of global trade.

Small countries with relatively high amount of exports typically have major world-class ports or manufacturing facilities located in special industrial zones, often with tariff and tax exemptions. These hubs are essential to the smooth functioning of global trade.

To figure out which nations are most dependent on trade, let's divide total exports by gross domestic product for the top 20 exporting countries, as measured by the International Monetary Fund. To make it easier to read, we'll multiply by 100.

Call the result "Trade Points", a measure of a place's reliance on exports.

Hong Kong, a territory of 7.3 million that is controlled by China but administered separately under a "one country, two systems" philosophy, is still one of the biggest ports in the world, and a key transit point for exports from the mainland. It has the most Trade Points, with 164.

The US scores only 8, and China 19. Despite all the fireworks, the two economic superpowers are less reliant on exports than one might think by reading the headlines, and well situated to survive a trade war, especially given the size of their internal markets and service economies.

Germany, the world's third biggest exporter, has 40 points, suggesting that, among industrialized economies, it has the most to lose from a trade war.

Most Trade Points among top 20 exporting countries, 2017

  • Hong Kong 164 points
  • Singapore 122 points
  • Belgium 87 points
  • Netherlands 79 points
  • Thailand 54 points
  • Taiwan 51 points
  • Switzerland 44 points
  • Germany 40 points
  • South Korea 38 points
  • Mexico 37 points

These export-reliant countries, the key lubricants of global trade, have mostly stayed out of the recent protectionist fray, another reason to suspect that while the global economy faces a number of risks, it's possible that trade, in the end, will turn out not to be one of the biggest.

What topic would you like the Trade Numerologist to cover? Email with comments and questions.

The Trade Numerologist is the IHS Markit unique weekly look at global trade by award-winning journalist John W. Miller, formerly of the Wall Street Journal, using proprietary numbers from the IHS Markit Global Trade Atlas database, the world's most complete and accurate set of trade numbers.



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