The world is getting less flat

REMEMBER the Trump trade wars? Actually, many of the tariffs that Donald Trump imposed are still in place — less, I suspect, because Joe Biden thinks they were justified than because giving Republicans an excuse to accuse his administration of being soft on China doesn’t seem like a good idea. But in any case, trade issues are currently being overshadowed by everything from inflation to the war in Ukraine.

Under the radar, however, some of what Trump wanted but failed to achieve — a return of manufacturing to the United States, for instance — may actually be happening under his successor. A recent Bloomberg review of CEO business presentations finds a huge surge in buzzwords like onshoring, reshoring and nearshoring, all indicators of plans to produce in the United States (or possibly nearby countries) rather than in Asia. So we may be seeing early indications of a partial retreat from globalisation. This isn’t necessarily a good thing, but that’s a topic for another day. For now, let’s talk about why this may be happening.

The first thing you need to know is that if we see some decline in world trade in the years ahead, it won’t be the first time that’s happened. It’s common to assume that the world is always getting smaller, that rising international interdependence is an ineluctable trend. But history says otherwise.