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“geopolitics is definitively moving against globalization — toward a world dominated by two or three great trading blocs.” This broader context, and especially the invasion of Ukraine, “is burying most of the basic assumptions that have underlain business thinking about the world for the past 40 years.”
John Micklethwait and Adrian Wooldridge,
A quarter-century ago, global trade expanded. Many thought inflation would vanish. Cheap goods from China and tech kept prices low. Now, this is changing. Blocking the most affordable sources increases prices.
Warning signs appeared over time. Donald Trump's presidency, Brexit, and COVID created trade worries. Trump's "America First" started a trade fight. Tariffs rose on Chinese products. In 2019, the US government gained $79 billion from tariffs. This doubled the amount from two years prior. Brexit made EU trade harder. Customs checks added import and export costs.
These events revealed how global trade works. UK carmakers saw issues. Their supply chain needed parts to move quickly across the Channel.
Covid truly stressed global trade. Lockdowns trapped ships in ports. When economies reopened, ships faced delays. Shipping costs grew a lot, sometimes four times higher. This caused delays and doubts about long, cheap supply chains.
The explosion in global connectivity and trade that was widely taken for granted for decades is certainly under pressure. From the COVID-19 pandemic to the United States-China rivalry, Brexit and the war in Ukraine, a confluence of factors is challenging the long-held assumption that business and investment should be able to move freely across borders. Where once the cost of doing business drove investment decisions, firms must now consider geopolitical and national security factors that increasingly drive governments’ policymaking.
In recent decades, global politics has created significant social inequality. In many nations, educated urban elites have gained control over media, education, culture, and political power. As a result, many people feel ignored and looked down upon. This discontent has led to the rise of populist leaders such as Donald Trump in the U.S., Narendra Modi in India, and Marine Le Pen in France.
At the same time, authoritarian leaders like Putin and Xi Jinping have taken this resentment to the global stage. They view the West as a group of global elites and openly challenge them. Putin recounts stories of Russia's humiliation by the West in the 1990s, promising a revival of Russia's greatness and its importance in world events.
Chinese leaders discuss the “century of humiliation,” criticizing how Westerners impose their values on others. Despite the possibility of becoming the largest economy, Xi still frames China as a developing nation.
Many people feel a strong connection to their communities and countries. However, over the years, many have sensed that their hometowns are being neglected and their national pride is under threat. During the height of globalization, multinational organizations and global companies began to overshadow nation-states.
The world is moving apart rather than coming together. Globalization is slowing down and, in some cases, reversing. Russia's invasion of Ukraine illustrates this shift. While Ukraine's resistance to authoritarianism inspires many in the West, much of the world remains indifferent or even supportive of Putin.
According to The Economist, from 2008 to 2019, global trade relative to world GDP dropped by about five percentage points. New tariffs and trade barriers have emerged. Immigration rates have decreased, and long-term investment flows fell by half between 2016 and 2019. The reasons for this trend away from globalization are varied. The 2008 financial crisis made global capitalism look less legitimate to many people. China's approach shows that mercantilism can be an effective strategy. Various anti-globalization movements have gained traction, including those from Brexiteers, nationalist groups, populists, and the anti-globalist left.
Currently, global conflict is more prevalent than it was during the brief period of stability in the 1990s. Trade, travel, and communication between political groups have become more complicated and contentious. Many companies have pulled out of Russia as the West reduces its ties to Putin's regime. Western consumers are wary of trading with China, given the allegations of forced labor and genocide. Many business leaders are reconsidering their operations in China due to increased hostility from the government and the risk of unstable supply chains. In 2014, the U.S. blocked Chinese tech firm Huawei from government contracts. President Biden has reinforced “Buy American” policies to encourage domestic purchasing.
The world economy appears to be dividing into distinct zones, mainly a Western zone and a Chinese zone. Five years ago, nearly $30 billion in foreign direct investment flowed between China and the U.S. Now, that figure has plummeted to $5 billion.
Morris Chang, the legendary founder of Taiwan’s (and the world’s) leading semiconductor producer, proclaimed that “globalization is almost dead.” In a world where supply chains have been disrupted by COVID-19 and the deepening Sino-American rivalry, other commentators have echoed this view, and many companies have begun “on-shoring” and “near-shoring” their procurement of goods
However.
The US has put new restrictions on the trade of certain sensitive goods with China. As a result, imports from China have only increased by 6% compared to pre-COVID levels, while imports from Canada and Mexico have surged by over 30%. This suggests that regional trade is recovering better than global trade for the US. However, a closer look reveals that China's share of US imports fell from 21% to 17% between 2018 and 2022, while imports from Vietnam, Bangladesh, and Thailand grew by more than 80%. These statistics indicate that globalization is not dead.
It is important to note that much of this increased trade with Asia involves indirect connections to China. The US and its partners are still more reliant on the Chinese economy than they were on the Soviet Union during the Cold War. For example, Western nations can limit security risks by excluding Chinese firms like Huawei from their 5G networks without completely dismantling global supply chains.
Even if rising geopolitical tensions reduce economic globalization, countries will remain interconnected through environmental issues. Problems like pandemics and climate change follow biological and physical laws, not political ones. No nation can tackle these challenges alone. Emissions from China can cause severe weather changes or rising sea levels in the US or Europe, and the same is true in reverse.
The costs linked to these issues could be significant. Scientists estimate that both China and the US experienced over one million excess deaths due to the COVID-19 pandemic that started in Wuhan. This situation partly stemmed from a lack of cooperation between the two nations. Addressing climate change or future pandemics will require an understanding of global interdependence, even if it is uncomfortable.
Technological advancements continue to drive globalization by diminishing the importance of distance. This trend is unlikely to change. Globalization is not finished; it may just take a different form than what we expect.
2025 Trump Declares war on Globalisation.
2025 Trump Declares war on Globalisation.
Donald Trump has dealt a dramatic blow to the post-World War II global economic order it helped establish. Portraying his country as a victim of commercial exploitation, Donald Trump announced tariffs on , April 2, 2025. Speaking in the Rose Garden of the White House, before his assembled cabinet and autoworkers from Detroit, the president set his country on a path reminiscent of neo-mercantilism – a relic from a world before tariffs when economies were designed to wage economic war. "Our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike," the president said. According to him, this "Liberation Day" is a prerequisite for the renaissance of the American industrial base. The US has not erected such barriers since the Hawley-Smoot tariffs of 1930, a few months after the 1929 crash. "Trump's biggest tariff blitz yet sends a clear message to US and foreign companies alike: The era of globalization is over," wrote the Wall Street Journal. Presented as a "declaration of economic independence,"
Globalisation “may have now run its course” in its current form, according to the chair of HSBC, as geopolitical tensions and US tariffs threaten to upend existing global trade.
Speaking at the bank’s global investment summit in Hong Kong on Tuesday 25 March 2025 , Sir Mark Tucker warned that trade tensions created uncertainty that posed a “serious potential risk to global growth”, in remarks reported by the Financial Times. He predicted stronger economic ties would develop between regional groups and trade blocs
Timeline of Crises of modern global capitalism
Timeline of Crises of modern global capitalism
1994–95 The Mexican economic crisis begins with the sudden devaluation of the Mexican peso and has an impact elsewhere in Latin America (the ‘Tequila effect’).
1997–98 The Asian financial crisis started in Thailand with the collapse of the baht but spread to most of Southeast Asia and Japan, where currencies slumped and stock markets crashed.
1998 The Russian financial crisis saw the collapse of stock,bond, and currency markets in the context of falling commodity prices in the wake of the Asian financial crisis.
1999–2002 The Argentine economic crisis began with a loss of investor confidence in the Argentine economy in a context of falling GDP, leading to a flight of money away from the country.
2000 The Dot-com crisis sees the bursting of the ‘dot-com bubble ’ after dramatic speculative rises in IT-related stocks since 1998. 2002, the Uruguay banking crisis witnessed a massive run on banks amid concerns about the Uruguayan economy linked to Argentina’s economic meltdown.
2007–08 The US subprime mortgage crisis precipitates the global financial crisis. 2007–09 The global financial crisis
2025, Trump's 'Liberation Day' USA adopts a global protectionist strategy.
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