How the EU is Managing Trade During the Coronavirus Pandemic

Coronavirus and EU trade. Read about the European initiatives designed to ensure the continuing production of goods & their movement during the pandemic.
How the EU is Managing Trade During the Coronavirus Pandemic
3 Min Read
April 9, 2020
Jules
3 min read
Apr 9, 2020

By now, you’ve probably heard a lot about how the spread of the coronavirus in Europe has caused major disruptions to supply chains. But, you may not have given much consideration to what this means for the European Union. As a borderless collective of countries, you might assume that supply chains within the EU and Europe trade would be operating as normal right now. But, that doesn’t account for the fact that most member states have now closed their borders and are clamping down on cross-border traffic, both of which provide effective trade restrictions. Or the fact that Europe also trades heavily with the rest of the world.

To protect its supply chains and trade, the EU has implemented several initiatives designed to ensure the continuing production of goods and their movement throughout the union. They’ve also made moves to ensure that access to global trade routes is maintained as much as possible within external constraints like low capacity and high air freight rates so that European trade is protected.

European Trade Before COVID-19

Like any other country, the EU is largely sustained by trade, both within its borders and with countries in other regions. German Chancellor Angela Merkel has pointed out that that trade within the EU is crucial to each member state’s survival because the “European single market is based on the division of labor fractured all across Europe.”

Within the EU, Germany is by far the biggest trader on the bloc. In 2019, Germany’s exports were worth over €57.5 billion; its imports were valued at €54.9 billion. Combined, France, Italy, Belgium, and the Netherlands accounted for the bulk of EU internal trade, with each country worth between €30-€50 billion each in net trade.

While the EU sees a lot of trade within its borders, it is also heavily reliant on trade with external countries. Its total imports from non-EU countries were valued at €1.9 trillion in 2019; exports to non-EU states were over €2 trillion. Currently, its biggest trading partner is the USA, which accounts for 15.2% of total EU external trade.

Europe's Top 10 Trading Partners

Country € Value (millions) % of EU Total Trade
USA 616,386 15.2
China 560,146 13.8
UK 511,798 12.6
Switzerland 257,036 6.3 6.3
Russia 232,360 5.7
Turkey 138,065 3.4
Japan 123,983 3.0
Norway 105,578 2.6
South Korea 90,686 2.2
India 77,782 1.9

What’s happening now?

As the COVID-19 pandemic has spread quickly through Europe over the last month, many EU countries have reacted by closing their borders, issuing travel restrictions, and implementing border checks. Germany, Slovakia, and Poland are just a few of the countries that have begun raising barriers that could affect trade.

Additionally, transportation between different countries in the area, which used to flow freely and without any border controls, has now been severely restricted. This has led to some issues with intra-EU supply chains and trade.

For example, at many of the EU’s internal borders, freight transporters are now facing significant wait times that are slowing the flow of trade. This could be an issue not just for the movement of goods, but also for the maintenance of supply chains. Germany’s automobile manufacturers, for example, depend on being able to get components and parts from other European countries.

It’s clear that the pandemic has had a significant impact on the EU’s trade with the wider world, too, particularly on EU trade with China. Rotterdam, in the Netherlands, is one of Europe’s biggest ports and usually processes some 470 million tonnes of goods every year.

By mid-March though, amidst the pandemic, Rotterdam’s traffic from China had fallen 20% compared to the same time the year before. Clearly, this is the result of China’s manufacturing slowdown earlier in the year and the subsequent rise in blank sailings in ocean freight and will have an overall major negative effect on trade routes between Europe and Asia.

European courier operations have also been affected by the pandemic, with many carriers facing route suspensions and delays. However, most consider themselves an essential service and are trying to operate as normally as possible.

You can keep an eye on European courier operations to see how it may affect you. And, you can still access shipping options to, from, and within Europe through the Easyship dashboard, all at affordable rates. You can sign up for a free account now to see how we can help you get your goods through the region.

How are European Couriers Being Affected?

As with trade and all other supply chains, the COVID-19 pandemic is having significant impacts on courier and mail services across Europe. Although it’s considered an essential service and most carriers are trying to maintain normal operations, they’re being restricted by route delays and government restrictions.

Courier Status Notes
Royal Mail (UK) Operational Some international routes have been suspended, all others are delayed. 1PM special delivery guarantee has been suspended, as has signature-on-delivery services.
La Poste (France) Limited operations Only 1,600 post offices are opened. Mail is only being delivered on Wednesday, Thursday, and Friday - expect delays. Signature-on-delivery is suspended.
Correos (Spain) Limited operations Office hours and personnel have been halved. Signature-on-delivery is no longer available, and mail is only being delivered on weekday mornings.
Poste Italiane Limited Operations Experiencing delays. Many offices are only open in the morning. PostaTarget and PosteInteractive services have been suspended, as has signature-on-delivery. International shipments are experiencing delays.
Deutsche Poste (Germany) Operational No major restrictions within Germany. Signature-on-delivery is not available.
DHL Opeational Experiencing delays due to government restrictions. Some retail locations have been closed. Temporary emergency surcharges apply and signature-on-delivery has been suspended.
FedEx Fully operational Waiving signature-on-delivery services. Money-back guarantee has been suspended for all FedEx Express services. Services have been suspended in India.
UPS Fully operational Facing some constraints due to government restrictions. Signature-on-delivery services have been suspended, as has the money-back guarantee.

For a more detailed breakdown of Europe’s courier impacts, please click here.

What Measures are the EU Taking to Ensure Trade Continues?

Being so heavily reliant on trade - both within its borders and outside them - it’s no surprise that the EU is taking steps to protect its local industries and their supply chains.

Ursula Von der Leyen, President of the European Commission has proposed that measures be put in place to prioritize and ensure the quick delivery of “essential goods.” These would include things that are required in the medical and emergency services and perishable goods.

The Commission has also approved a move to temporarily waive customs duties and VAT on the import of medical devices and protective equipment from non-EU countries to ensure that hospitals and medical staff would have access to whatever they need to fight the pandemic.

Guidelines have also been issued to help minimize customs formalities, making it easier, for example, to import human organs and bone marrow for transplant into the EU or proving the preferential origin of goods.

All countries have also been removed from the list of “marketable risk” countries under a short-term export-credit insurance scheme in a bid to mitigate at least one potential trade restriction. Because many businesses are currently short on cash and facing increasing trade-related financial risks, many private insurers have stopped dealing with short-term export-credit.

By removing countries from the list of “marketable risk” the Commission hopes to allow more companies to access public short-term export-credit insurance that they need to continue trading.

Of course, ensuring that trade remains viable also means making sure that enough goods are being produced. To that end, the Commission has adopted a Temporary Framework that will ensure food security within the EU.

This includes a range of measures such as aid of up to €100,000 per farm, more time to apply for support, and additional flexibility for on-the-spot checks. These food security measures are concentrated in the EU’s agricultural and fishing industries and are designed to ensure enough fresh produce is created to maintain European trade.

What’s Happening with Brexit? What Effect will this have on Trade?

Good question. The transition deadline was extended to December 31, 2020, at which time a new EU-UK trade deal was expected to have been concluded. However, given the pandemic and the fact that key negotiators and figures within the Brexit negotiations have fallen sick, it seems unlikely that a new trade deal will be reached in time for the current transition deadline, leaving the question of UK-Europe trade in limbo.

However, both the European Commission Vice-President, Maros Sefcovic, and UK Senior Minister Michael Gove have stated that a withdrawal agreement [and trade deal] is a key priority, and remain optimistic that they’ll be able to share a draft of a free trade agreement in the “near future.”

That’s because without it, supply chains - and, by extension, many businesses - could face widespread adverse effects, from untenable financial burdens to production issues. A trade agreement will ensure that new tariffs and trade barriers don’t restrict trade between the UK and the EU.

One of the big concerns, however, is the fact that the pandemic is likely to cause a massive long-term shift in cross-border trade and supply chains; we’re already seeing some changes taking place. Thus, it seems unlikely that a new trade deal will be put in place until both the EU and UK can figure out what these changes are and the effects they will have.

During the transition period, the UK will still be considered part of the EU’s single market and customs union. This means that, through December 2020 at least, there will be no trade restrictions - such as tariffs, quotas, or checks - between the EU bloc and the UK. In theory, Europe will trade with the UK as normal.

Of course, before the coronavirus pandemic, the UK was already working furiously to secure trade deals with other countries. So far, they’ve managed to secure 19 deals covering 50 countries or territories, including Jordan, Morocco, South Korea, Lebanon, the Caribbean countries, Israel, Switzerland, and Chile. However, these only account for about 8% of the UK’s total trade.

What Effects will the US Travel Ban on the EU Have on Trade?

The EU was understandably shocked when, on March 11, President Trump announced a travel ban that would bar foreign nationals who had been in Europe in the previous 14 days from entering the US.

This was an unforeseen unilateral move designed to curtail the spread of COVID-19 in the US, and covered popular vacation and business destinations such as Germany, Italy, Belgium, and Switzerland. Many were left wondering about how the US and EU travel bans would result in trade restrictions and blocked supply chains.

However, the President made a point of assuring everyone that trade between the US and EU would continue unchecked as it was an “economic priority.” The President of the European Commission echoed this, saying that the travel restrictions did not apply to goods and cargo and that Europe’s trade links with the US would continue.

How Does China Factor into this?

As previously mentioned, China is the EU’s second-biggest trading partner, accounting for some 13.8% of its Europe’s total trade. As a result of a manufacturing shutdown in China, and the resulting blank sailings for ocean freight and low cargo capacity for air freight, trade between the EU and China has fallen over the last month and will probably fall further in the next weeks.

That’s not to say, though, that both sides aren’t going to try to limit the fallout. Last year, China’s Foreign Minister, Wang Yi, said that an investment agreement between the EU and China was a “top priority,” and while the pandemic may stall negotiations, it’s unlikely to halt them completely.

China will be keen to help Chinese companies get a better foothold in the EU market once the pandemic is over; the 5G sector will be a big part of these plans. It will be interesting to see how this plays out, given that before the pandemic, Europe was largely resistant to the idea of having Chinese 5G technology in the region.

Moving Forward

It’s clear that, like the rest of the world, Europe’s supply chains and trade has been affected by the COVID-19 pandemic. This will be further complicated by geopolitical issues like Brexit and European resistance to Chinese 5G technology. The development of EU trade with China will be interesting to watch. However, it’s clear that the union is taking steps to protect its industries and supply chain amidst the coronavirus pandemic in Europe, and that it is already focusing on efforts to shore these up in the future.

TABLE OF CONTENTS
Get Your Ship Together.

By submitting the form, you agree to receive marketing emails from Easyship.

Save up to 91% on Shipping. Try for free.

Effortlessly compare 550+ courier services with one global account. Instant discounts. Start in minutes.

Shipping Internationally? Unsure What Tariffs or Duties Apply?
Try our FREE Tax & Duty Calculator

Trying to stay up to date on the latest cross-border shipping and import requirements? Get an instant estimate of all applicable taxes and duties for every country across 220+ global destinations or sign up and take advantage of our in-built HS Code lookup tool.

Calculate Tax & Duties Instantly (Free Tool)
Ready to Stop Overpaying for Shipping?
Try our FREE Shipping Rate Calculator

Looking for the cheapest way to ship a package? Get an instant shipping quote and compare rates from 550+ courier services across the United States, Canada, UK, Australia, and more. Simply add your package size and delivery location, and you'll find the best deal in seconds.

Calculate Rates Instantly (Free Tool)
Planning Your Campaign?

Get in touch with us now and our shipping consultants can give you a detailed quote and additional info to help with your campaign.

Get in touch
The Cheapest Shipping from USPS, UPS & FedEx

Find the guaranteed cheapest rates for any courier in seconds with Easyship’s free shipping rate calculator. Compare discount rates from USPS, UPS, FedEx, and 250+ couriers at a glance.

GET RATE QUOTES FREE
The Cheapest Shipping from USPS, UPS & FedEx

Find the guaranteed cheapest rates for any courier in seconds with Easyship’s free shipping rate calculator. Compare discount rates from USPS, UPS, FedEx, and 250+ couriers at a glance.

GET RATE QUOTES FREE
Get in touch with our fulfillment experts!

We believe simple pricing is the best pricing. Get a quote with a simplified pricing structure and no hidden fees.

Contact us
Need help fulfilling your crowdfunding campaign?

We provide the necessary tools needed to keep you on budget for shipping and to safely deliver your product to backers around the world.

Learn more
Try our duty & tax calculator!

Need to estimate your shipping duties & taxes? Our calculator can give you an idea of what to expect.

TRY IT NOW
Save up to 91% on Shipping. Try for free.

Compare 550+ courier services with one global account. Start in minutes.

GET STARTED FOR FREE
Get a Free Quote for Your Campaign

Receive a personal cost estimate for your crowdfunding campaign from our trusted global fulfillment partners. Easyship is a certified Indiegogo partner.

GET FREE QUOTE
Looking for great rates from a top courier?

Save up to 74% on UPS shipping rates by shipping with Easyship. You can run a quote and generate your first shipments in literally minutes!

SHIP WITH UPS TODAY
The cheapest way to ship for eCommerce

Get instant access with volume-discounted shipping rates. Save up to 89% off on USPS, UPS, FedEx, and more. Easyship is free for 50 shipments each month.

SIGN UP FREE TO SAVE
Find your perfect fulfillment partner with expert help

Let Easyship connect you to the largest shipping and fulfillment network on Earth. You’ll find trusted partners for all things logistics. Guidance is free from our global shipping experts.

ASK AN EXPERT
Don’t miss our money and time-saving features!

Explore the powerful features that 100K+ merchants use to ship smarter, not harder. Shipping automation, live rates at checkout, live duty and tax – all free to try with Easyship.

EXPLORE ALL FEATURES
Start saving on shipping in seconds

Create your free Easyship account to streamline shipping and save with discounted rates. No hidden fees. No minimums. Just savings.

CREATE YOUR FREE ACCOUNT
Create Your Shipping Policy Free

Use our guided walk-through to build the perfect shipping policy for your eCommerce business.

CREATE YOUR POLICY FREE
Looking to intergrate your Shopify store?

With 550+ pre-negotiated shipping services available with discounts of up to 91%, you can save time & money today when you integrate your Shopify store with Easyship

REGISTER FOR FREE
Use Easyship Free Every Month

Easyship is free to use for 50 shipments every month. You’ll save big on our discounted shipping rates up to 91% off, and save time with smart automation. Signup is fast and free.

CREATE YOUR FREE ACCOUNT
Don’t miss the key steps to fulfillment success

Follow the easy path to fulfillment success. Easyship’s free fulfillment checklist provides a proven step-by-step so you can ship at scale without the guesswork.

VIEW THE CHECKLIST
Ship for less with any courier, guaranteed

Save up to 89% off all shipping rates. Easyship offers the guaranteed cheapest volume-discounted rates on the market from USPS, UPS, FedEx, and 250+ global couriers.

SIGN UP TO SAVE
Don’t miss all our money and time-saving features!

Explore the innovative features that 100K+ merchants use to ship smarter, not harder. Shipping automation, live rates at checkout, live duty and tax – all free to try with Easyship.

EXPLORE FEATURES
Want the cheapest rates?

Register for an Easyship account today and you will gain access to the cheapest rates, instantly.

REGISTER FOR FREE
Watch out for international duty and tax!

What exactly does it cost to ship cross-border? Use the free duty and tax calculator from Easyship to view accurate import costs for any shipment to anywhere.

USE FREE
Protect Your Crowdfunding Budget from Cost Creep

Prices are rising, deliveries are slowing. Get up to speed on the state of crowdfunding shipping with expert Easyship analysis and keep your campaign on budget.

LEARN MORE
Discover the Cheapest Shipping from USPS, UPS & FedEx

Find the guaranteed cheapest rates for any courier in seconds with Easyship’s free shipping rate calculator. Compare discount rates from USPS, UPS, FedEx, and 550+ courier services at a glance.

GET A FREE QUOTE
Discover Your Cheapest Way to Ship

Find the guaranteed cheapest shipping in seconds with Easyship’s free shipping rate calculator. Compare discounted rates from USPS, UPS, FedEx, and 250+ global couriers at a glance.

COMPARE RATES FREE
Compare the best rates in seconds

Get an instant estimate of the cheapest shipping rates with our free calculator tool.

GET FREE RATE QUOTES
Save money on every shipment

Save up to 91% off shipping with Easyship’s discount courier rates. Create your free account to save instantly on 550+ courier services, including USPS.

CREATE YOUR FREE ACCOUNT
Ready to ship internationally?

Get help from our global shipping experts on warehousing, global shipping and to connect with our network of trusted 3PLs.

GET FREE SHIPPING TIPS
How’s Your Covid Shipping Policy?

Use our free shipping policy generator to formulate your safest, most customer-friendly shipping policy in seconds.

GET YOUR SHIPPING POLICY
Try Pre-generated Return Labels For Free

Register for an Easyship account today and get 30-days access to a Premier plan with access to Pre-generated Return Labels.

Generate Return Labels Today
Discover the Cheapest Shipping from USPS, UPS® & FedEx

Find the guaranteed cheapest rates for any courier in seconds with Easyship’s free shipping rate calculator. Compare discount rates from USPS, UPS, FedEx, and 250+ couriers at a glance.

GET RATE QUOTES FREE
Get Up to Speed On Covid Shipping

Explore our Covid shipping resources to make sure your shipment arrives on time and in good condition.

LEARN MORE
Free Shipping for the Holidays 101

Learn how the leading brands offer free shipping, calculate costs, and ship on a budget for the holidays in our free shipping guidebook.

LEARN MORE
Your Perfect Shipping Policy, Ready in Minutes

Use Easyship’s free shipping policy generator to formulate your perfect holiday shipping policy for returns, tracking, and more. Just follow the prompts and you’re done!

GET YOUR SHIPPING POLICY
Scale Your Growth Internationally With Pro Tips

Learn how to ship internationally without missing a step. Our case studies show you proven tactics for shipping worldwide from Easyship users who did it right.

READ CASE STUDIES
No items found.
Share on:

Related Articles

No items found.