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Impact of the First Wave of the COVID-19 Pandemic on Trade between Canada and the United States

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  • Miguel Cardoso
  • Brandon Malloy

Abstract

We examine how the coronavirus disease 2019 (COVID-19) pandemic has affected trade between Canada and the United States, using a novel dataset on monthly bilateral trade flows between Canadian provinces and US states merged with COVID-19 health data. Our results show that a one-standard-deviation increase in COVID-19 severity (case levels, hospitalizations, deaths) in a Canadian province leads to a 3.1 percent to 4.9 percent fall in exports and a 6.7 percent to 9.1 percent fall in imports. Decomposing our analysis by industry, we determine that trade in the manufacturing industry was most negatively affected by the pandemic, and the agriculture industry had the least disruption to trade flows. Our descriptive evidence suggests that lockdowns may also have reduced Canadian exports and imports. However, although our regression coefficients are consistent with that finding, they are not statistically significant, perhaps because of the lack of variation as a result of similar timing in the imposition of restrictions across provinces.

Suggested Citation

  • Miguel Cardoso & Brandon Malloy, 2021. "Impact of the First Wave of the COVID-19 Pandemic on Trade between Canada and the United States," Canadian Public Policy, University of Toronto Press, vol. 47(4), pages 554-572, December.
    • Handle: RePEc:cpp:issued:v:47:y:2021:i:4:p:554-572
    DOI: 10.3138/cpp.2021-028
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    1. Jonathan Eaton & Samuel Kortum & Brent Neiman & John Romalis, 2016. "Trade and the Global Recession," American Economic Review, American Economic Association, vol. 106(11), pages 3401-3438, November.
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    5. Baldwin, John R. Fisher, Anthony Gu, Wulong Lee, Frank C Robidoux, Benoît, 2008. "Capital Intensity in Canada and the United States, 1987 to 2003," The Canadian Productivity Review 2008018e, Statistics Canada, Economic Analysis Division.
    6. Meier, Matthias & Pinto, Eugenio, 2024. "COVID-19 Supply Chain Disruptions," European Economic Review, Elsevier, vol. 162(C).
    7. Joel Blit, 2020. "Automation and Reallocation: Will COVID-19 Usher in the Future of Work?," Canadian Public Policy, University of Toronto Press, vol. 46(S2), pages 192-202, August.
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    Cited by:

    1. Miguel Cardoso & Brandon Malloy, 2024. "Spillovers from government policy during a crisis: Evidence from international trade during COVID‐19 lockdowns," Review of International Economics, Wiley Blackwell, vol. 32(3), pages 1238-1269, August.

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    More about this item

    Keywords

    COVID-19; Canadian trade; international trade; manufacturing; lockdown restrictions;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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