Swiss Trade During the COVID-19 Pandemic: An Early Appraisal

This study uses trade data from Switzerland's Federal Customs Administration to examine the impact of COVID-19 on international goods trade between January and July 2020. We show that Swiss trade during that period fell by 11% compared to 2019, and that the contraction following the “Federal Lockdown” in mid-March was considerably steeper than the Swiss trade collapse in the aftermath of the Lehman Brothers bankruptcy in September 2008. Exploiting country variation in the spread of COVID-19, the stringency of containment measures, and Swiss trade flows, we document that the pandemic adversely affected both the demand and supply side of foreign trade. We discuss several channels at work and show that our COVID-19 measures are correlated with country-specific consumer and producer confidence series, which explain considerable heterogeneity in the observed trade dynamics.