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

Miguel Cardoso and Brandon Malloy

Canadian Public Policy, 2021, vol. 47, issue 4, 554-572

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.

Keywords: COVID-19; Canadian trade; international trade; manufacturing; lockdown restrictions (search for similar items in EconPapers)
Date: 2021
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