Globalisation Is in Decline

The disruption to the world trade rules is having an impact on globalisation. Some would argue that this is not a bad thing as over-reliance on Chinese and other cheap sources of production had a negative impact on national economic development as foreign direct investment weakened domestic investment which influenced weaker growth in the Western economies’ growth.

As a result of the Trump presidency global trade is under siege from weaponised tariffs and instability in the decisions taken. Trade forecasting and with which partners has become a guessing game as a result. Trade agreements are not firm and subject to change, perhaps best known as TACO, and new coercive tariffs are applied as a bargaining tool which are extremely disruptive.

Mark Carney clearly defined the current state of affairs as a “rupture” in prior relationships which requires the middle countries to work together to prevent further disruption and to accept that reliance and trust are outdated, indirectly referring to the US. We are beginning to see a shift away from traditional trading partners, for example between 2019 and 2025, China’s share of import tonnage to the US. (over the first 11 months of each year) plummeted from 31.6% to 26.3%, with a 3.8% decline occurring in just the last year. Filling this void are Vietnam and India: Vietnam nearly doubled its slice of the pie from 4.2% in 2019 to 8.2% in 2025, while India’s share climbed from 4.9% to 6.0%. Other countries, like Thailand, have also seen notable gains, but some regions like South and Central America have lost ground according to US Census Bureau.

China has shifted its export with a focus on Asian economies and Europe, but this is creating its own repercussions as the EU is focusing on growing its internal economies with new trade agreements with India and soon Mercosur and possibly Australia. Canada has likewise reach out to increase trade beyond its heavy reliance on the US

In short there is a greater focus on internal growth for Western economies, supported by new trade agreements but in the EU this is hampered by national disagreements on the way forward which of course weakens their ability to adapt to the shift away from the US. The impact of all of this on ports will be significant as new trading networks are being developed particularly with the use of larger ships relying on increased feeder routes. Carriers are increasingly investing in additional ports and terminals as well as inland supply chain management. A brave new world with a hazy outlook.