Trade war and globalisation backlash pushing trading nations to the economic brink as recessions loom

Two of the world’s most famous trading nations, Germany and Singapore, are facing recessions later this year, largely due to slowdown in global trade

Donald Trump era has helped create increasingly tough time for nations reliant on exports, with further storm clouds on the horizon

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Singapore’s non-oil exports for July were reported to have fallen by 11.2 per cent from a year earlier, better than the expected 15.3 per cent drop, but still a fifth successive monthly decline. Photo: AFP

Published: 9:30pm, 16 Aug 2019Updated: 9:53am, 22 Aug 2019

Three years of full-blooded backlash against globalisation have pushed both Germany and Singapore to the brink of recession, highlighting the increasingly dire situation facing the world’s trading nations.

Singapore, along with Hong Kong, has long been championed as Asia’s beacon of free commerce and relaxed business rules. On Friday, however, its non-oil exports for July were reported to have fallen by 11.2 per cent from a year earlier, better than the expected 15.3 per cent drop, but still a fifth successive monthly decline, and a sign of how exposed it is to the troubled trading environment.

Only Luxembourg relies more on trade than Singapore, with the value of goods that were traded through the Port of Singapore last year worth 326 per cent that of the city state’s entire economy.

The trade data followed Tuesday’s news that second quarter gross domestic product (GDP) growth in Singapore was minus 3.3 per cent on a quarterly basis, down from 3.8 per cent growth in the first quarter of 2019. Should it shrink again next quarter, as is expected by many analysts, Singapore will be in a technical recession.

Singapore’s pain has been shared by Asia’s other export hubs such as Taiwan and South Korea, whose economic woes stem largely from their exposure to China and its slowing growth and intensifying trade war with the United States.