How does global trade look like? - January 08, 2017

How does global trade look like?

How does international trade look like? Metrocosm, a page specialized in data-driven content has an answer for you in the form of an interactive map. The map is based on data from 2015 but it still looks extraordinary, even if this year may bring great changes to the picture.

 



 

As Metrocosm puts it based on UN’s Comtrade data: “imported goods totaled $15.6 trillion in 2015”, and we can see all of it on this map, every dot representing $1 billion in value.

What makes this map interesting – apart from being interactive – is that we can see how concentrated this market actually is. Not surprisingly there are three main hubs: the U.S., Europe (lead by Germany) and Asia (lead by China). This was expected, but looking at the map we can see how almost half of all global goods are going through the three mentioned countries, which is an enormous amount.

In the meanwhile, there are countries that have virtually no part in global trade. There are countries in Africa that almost absolutely lack global trade. There are countries with even less trade: North Korea’s only partner is China and they don’t do a lot of trading either.

Another thing that Metrocosm underlines is that Canada and Mexico is surprisingly dependent on the U.S. But this goes both ways here, Mexico and Canada is roughly equal in exports and imports with the States.

While we can see how global trade was in 2015, we can expect some changes this year. Trump’s presidency may bring protectionism to the U.S. and to other countries as well. Trump already made some headlines with his soft trade war against China. China warned Trump against this, and their word is indeed important: they are the king of trade with $1.9 trillion in imports and $2.1 trillion in exports.

But there are other factors that could change global trade, namely the forming Trans-Pacific Partnership, the Transatlantic Trade and Investment Partnership and the birth of China’s Asian Infrastructure Investment Bank. (We already wrote of these in our post: TPP – The pros and cons of a treaty.) All these treaties are far away and Trump can also alter the course of them, making 2017 even more interesting. Some other things may change too: parts of manufacturing may return to the U.S. (Ford already plans this e.g.), but global trade won’t and can’t go away as that is the engine of global growth.

Disclaimer: This analysis is for general information and is not a recommendation to sell or buy any instrument. Since every investment holds some risk, our main business policy is based on diversification to minimize threats and maximize profits. Innovative Securities’ Profit Max has a diversified portfolio, which contains liquid instruments. This way, our clients can maintain liquidity, while achieving high returns on their investments.