In the last article we see the challenge to foreign trade is covid-19. But the challenge is only that? Of course not. There are many other challenges.
Presently, the most important challenge is the war
It has been over one month that Russia take military action in Ukraine. Since the war beginning, the world situation and foreign trade becomes to change. With the USA and Europe declaring sanction to Russia, the trade becomes more difficult. It’s mainly on the following aspects.
First is the sanction
The USA and Europe forbid the local residents to invest in Russia. Besides, Germany, France and other Europe countries cut off the energy trade with Russia. The typical affair is that Germany declares to shut down the “Nord stream 2” natural gas project and stop the contract. What’s more, USA asks the allies to sanction Russia and forbid them to trade with Russia. Many countries afraid the sanction from western countries, so they stop the trade with Russia.
As the reaction to sanction, Russia also take some anti-sanction measures. For example, Russia has cut off the gas supplying to Europe.
As a part of sanction, USA and Europe forbid Russia to use USD and Euro in the trading with others. For this, Russian Rouble devalued sharply. This cause a series problem to the world currency system. In another hand, the sharply changed exchange rate cause people unwilling to place new order. They want to stay and wait for a stable exchange rate.
With the expanding of sanction, western countries kick Russia out from the SWIFT. That means Russian buyer can’t pay the balance to the seller.
Russia is one of the biggest mineral resources in the world. Thus we can say that the war and sanction will exactly affect the price of raw material and metals. Which will be a bad news for trade industry.