Back in 2017 when the U.S. embarked on withdrawing from multi-lateral treaties and then imposing tariffs on many imported goods across a wide range of major trading partners including China and the European Union, it looked like the pendulum of change was swinging away from globalization to enter an era of de-globalization. Four years later, the reality is quite different.
Globalization is alive and well, just in an altered form. What is happening is that trade patterns are being re-arranged. This is occurring not only due to the end of the post-WWII era of “Pax Americana” defined by US economic and military might, but also due to the pandemic’s impact on supply chains, the market’s reaction to the virus’ continued spread, the reality of the UK’s formal separation from the European Union through Brexit, and the strikingly different economic growth prospects of many countries around the world post-pandemic. Here are our six key observations related to the shifting dynamics of world trade.
None of these changes and challenges are necessarily a step back from globalization. If the pandemic has reminded us of anything, it’s that we are all part of the same global system. Globalization is adjusting to new realities and opportunities, and the growth of world trade is likely to accelerate in the process.
All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author(s) and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
Bluford “Blu” Putnam has served as Managing Director and Chief Economist of CME Group since May 2011. With more than 35 years of experience in the financial services industry and concentrations in central banking, investment research, and portfolio management, Blu serves as CME Group’s spokesperson on global economic conditions.
View more reports from Blu Putnam, Managing Director and Chief Economist of CME Group.
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