Covid-19 and International Trade: The Effect of the Pandemic on Global Transport Prices

This paper attempts to analyze the impact that the prevalence of the COVID-19 pandemic -represented by COVID-19 cases - has had on international trade. Furthermore, it looks to find a correlation between the severity of the pandemic - in terms of positivity and death rates due to COVID-19 - and impacts on global supply chains. Using data from the last two years to perform ordinary least squares regressions, we find that, as predicted, as the prevalence of the coronavirus increases, the price of trade – represented by the Baltic Dry Index – also increases, indicating a positive correlation between the two. Furthermore, we find that the results from the analysis of coronavirus deaths and the BDI showed that there is a positive correlation between the two, and the analysis of the COVID-19 positivity rate and the BDI showed a negative relationship, which goes against my hypothesis. Thus, looking at these results can give us a mixed but more complete idea of the negative impacts that the pandemic has had on global trade. Additionally, from this analysis we are not only able to better understand the impacts that a virus like COVID-19 has had on worldwide trade, but also, the results gathered in this study may help us prepare supply chains for a potential future pandemic.