Covid, and then Russia’s war on everyone, have led to numerous changes in global trade.
Some argue that the multi-decade period of global trade expansion is ending and we will return to more domestic production.
In reality, globalization will change – it is not going away. As many suggest, trading partners may shift. What was once produced in a factory in China may now be made in Vietnam, Mexico or other countries.
With the significant demographic issues in play – the crashing fertility rate, population decline in many well-developed countries, and the desire to import more immigrant workers – globalization would appear to be expanding in the future. 281 million people moved to another country – last year. Throughout history and over time, the trend has always been towards more globalization, not less.
Inflation has come from government money printing, but there are also supply constraints created by public health policies over the past 3 years. Consumers are probably not keen on further trade restrictions that would lead to even higher prices.
Some articles on these topics:
- Global flows: The ties that bind in an interconnected world | McKinsey
- Global trade is shifting, not reversing: WSJ | Al Mayadeen English
- The unstoppable march of globalization – Asia Times
- And the naysayers: Sleepwalking Into a Global Trade War by Anne O. Krueger – Project Syndicate (project-syndicate.org)
