Tracking global trade: protectionism begins to bite

The war in Ukraine and lockdowns in China continued to reverberate through global supply chains through Q2. A new and worrying rise in trade protectionism could exacerbate those pressures for longer.

The chart below helps paint a picture of which regions faced the most pressure, showing how the war in Ukraine and new lockdowns in China are influencing the ebb and flow of global goods.

“Russian imports fell by 39.6% - reflective of sanctions against the country, while exports grew 18.1%, driven by higher oil & gas prices.”

Import growth was concentrated in advanced economies, especially EU, US, and UK, while the imports of emerging economies contracted sharply (-4.7%) – with China (-12%) and Eastern European CIS countries (-16.4%) witnessing the largest slowdowns. 


Export and import growth in March 2022

Sources: CPB Netherlands, NatWest Markets. Last quarter = Q4-2021; Pre-Covid = Q4-2019.


Global shipping pressures continue easing

On the other hand, global shipping costs retreated at an impressive rate across nearly all Asian outbound trade routes, continuing their fall from their historic heights reached in September 2021. The drop in China-Europe shipping costs was likely linked to seasonality, a shortfall in available exports and the impact of higher inflation on European consumer demand. Meanwhile, ongoing Covid-related closures and associated delays were driving down the China-North American shipping freight rates.

Global shipping costs continued easing across most routes

Sources: Freightos Baltic Container Freight Index, NatWest Markets. Index: Jan-2020=100.


How will rising export restrictions and port congestion affect global supply chains?

In the months ahead, global trade looks likely to continue grappling with the broad-based impact of the war in Ukraine and a covid resurgence in China. We see two main themes weighing heavily on supply chains in the months ahead.

Rising food protectionism: Since the Russian invasion of Ukraine, export curbs have spread globally, adding to food-inflation pressures, and marking another setback for free trade. The number of countries imposing export restrictions on food has gone up from 3 to 23 since March, and by the end of May included 45 separate measures. Governments have been limiting food exports (via actual bans, export licences and taxes) to provide some relief to the local masses from rising prices and to maintain domestic supplies. Russia has for example banned the sale of sugar, sunflower oil, and grains. Indonesia, which produces more than 50% of the world’s palm oil, has stopped its outgoing shipments. India has restricted wheat, with possible additional bans on sugar and rice.

More pressure on shipping to come: We took a closer look at the percentage of global container ship cargo capacity tied up and unable to be loaded or unloaded due to port congestion in sea areas up to 500 kms from major ports worldwide. The data shows a considerable rise in container ships waiting off Shanghai and neighbouring Ningbo-Zhoushan (the world’s third-largest port). Those levels are not as severe as what was seen during the Wuhan lockdown (in early 2020). But they have crossed levels witnessed during Yantian in Shenzhen (in June 2021) and are seemingly approaching the levels during the Ningbo closures in August last year (which sent shipping prices much higher).

Given what’s been said, it’s perhaps unsurprising that we’ve seen supply chain pressures intensify in the Euro area, UK, and China – as our Regional Supply Chain Index (RSCI) below shows.


RSCI: Supply chain pressures intensify in the Euro area, China, and the UK

Sources: National sources, NatWest Markets. Note: Numbers indicate standard deviations away from the mean. Green shows improvement. Red shows intensification of pressures.


Looking ahead, rising trade protectionism in response to the war in Ukraine – and the pressures on supply chains that they bring – could conceivably last as long as the conflict continues. Similarly, rising congestion at Chinese ports could lead to higher prices despite a continued easing of covid restrictions. Both pressures underscore the growing (and ensuring) importance of supply diversification, supply chain resilience, and end-to-end supply chain transparency.


Get in touch

To learn more about the implications of global supply chain pressures for your financial strategy, speak with your NatWest representative or get in touch with us by clicking here.

This article has been prepared for information purposes only, does not constitute an analysis of all potentially material issues and is subject to change at any time without prior notice. NatWest Markets does not undertake to update you of such changes.  It is indicative only and is not binding. Other than as indicated, this article has been prepared on the basis of publicly available information believed to be reliable but no representation, warranty, undertaking or assurance of any kind, express or implied, is made as to the adequacy, accuracy, completeness or reasonableness of the information contained in this article, nor does NatWest Markets accept any obligation to any recipient to update or correct any information contained herein. Views expressed herein are not intended to be and should not be viewed as advice or as a personal recommendation. The views expressed herein may not be objective or independent of the interests of the authors or other NatWest Markets trading desks, who may be active participants in the markets, investments or strategies referred to in this article. NatWest Markets will not act and has not acted as your legal, tax, regulatory, accounting or investment adviser; nor does NatWest Markets owe any fiduciary duties to you in connection with this, and/or any related transaction and no reliance may be placed on NatWest Markets for investment advice or recommendations of any sort. You should make your own independent evaluation of the relevance and adequacy of the information contained in this article and any issues that are of concern to you.

This article does not constitute an offer to buy or sell, or a solicitation of an offer to buy or sell any investment, nor does it constitute an offer to provide any products or services that are capable of acceptance to form a contract. NatWest Markets and each of its respective affiliates accepts no liability whatsoever for any direct, indirect or consequential losses (in contract, tort or otherwise) arising from the use of this material or reliance on the information contained herein. However this shall not restrict, exclude or limit any duty or liability to any person under any applicable laws or regulations of any jurisdiction which may not be lawfully disclaimed.

NatWest Markets Plc. Incorporated and registered in Scotland No. 90312 with limited liability. Registered Office: 36 St Andrew Square, Edinburgh EH2 2YB. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. NatWest Markets N.V. is incorporated with limited liability in the Netherlands, authorised and regulated by De Nederlandsche Bank and the Autoriteit Financiële Markten. It has its seat at Amsterdam, the Netherlands, and is registered in the Commercial Register under number 33002587. Registered Office: Claude Debussylaan 94, Amsterdam, the Netherlands. Branch Reg No. in England BR001029. NatWest Markets Plc is, in certain jurisdictions, an authorised agent of NatWest Markets N.V. and NatWest Markets N.V. is, in certain jurisdictions, an authorised agent of NatWest Markets Plc. NatWest Markets Securities Japan Limited [Kanto Financial Bureau (Kin-sho) No. 202] is authorised and regulated by the Japan Financial Services Agency. Securities business in the United States is conducted through NatWest Markets Securities Inc., a FINRA registered broker-dealer (, a SIPC member ( and a wholly owned indirect subsidiary of NatWest Markets Plc.

Copyright 2022 © NatWest Markets Plc. All rights reserved.

scroll to top