A report published by the Kiel Institute for the World Economy (IfW Kiel) showed that global trade volume decreased by 1.3% in December compared to November, as attacks on merchant ships in the Red Sea led to a drop in cargo traffic in this key region.
IfW Kiel said that many transportation companies switched to longer routes due to the attacks, resulting in journeys between Asian production centers and European consumers taking up to 20 days longer.
"The tense situation in the Red Sea also negatively affects the trade indicators of Germany and the EU, since the transported goods are now still at sea and have not yet been unloaded at ports as planned," IfW Kiel reported, adding that their own trade indicator show a decrease in exports and imports to the European Union by 2% and 3.1%, respectively, compared to November. The United States saw a 1.5% drop in exports and a 1% drop in imports, while China's exports and imports increased by 1.3% and 3.1%, respectively, which was probably due to the upcoming Chinese New Year.