Globalization will win over Donald Trump

Happy Sunday. April 2 – either “Liberation Day” as Donald Trump dubbed him inevitable. US trading partners will soon find out what the “mutual” presidential plan looks like.

The fear of the deglo -ized world is high. In the world trade of goods and national security doctrine in Vogue, many worry that Trump tariffs can become a straw that violates the back of globalization.

So for this week dialectic, I went in search of countergags. That’s why Trump 2.0 will not be a deadly strike on international trade.

In the first place, the importance of the United States for global trade can be overstated, as it is the world’s largest economy. America accounts for only 13 percent of the imports of world goods to be reduced from close to fifth two decades ago. This makes it the largest importer and noticeable influence on trading models, but not enough to restore globalization on its own.

To measure Simon Enett, Professor Business Schools IMD, recently led useful Thinking experiment. He found that even when the US was disconnected all Imports of goods, 70 of their trading partners, completely make up lost sales in the US for a year, and 115 will do so for five years, believing that they have retained their current growth rates to other markets.

The US is not the main engine of world growth. Europe – and recently China – greater participants. And both economic powers are likely to continue to play for free trade, according to the recent analysis of Mallika Sachdeva, the Deutsche Bank Research strategist.

China needs to ensure the contribution to the raw materials (hence its initiative of belts and roads) and world markets to support President Xi Jinping growth strategy, which is focused on “new quality productive forces”. Beijing has already told about the need to “resist unilateral” because US protectionism is increasing.

However, for all the hobbas about the US-Kita Trade War, the share of the world’s trade that goes directly between them is only About 2.6 percent.

The EU plays a more important role than in the management of global trade – the one that will probably grow. Trade remains the main one in the European project. Entra-Eu trade will probably improve as the block will increase the efforts to defend and economic integration in response to the warlike part of Trump. Brussels also recognizes the need to be pragmatic in trading with China, given its ambitions quickly to go green and jump on a technical curve. (Eg using Transfer intellectual property as a condition for the transition of Chinese production to Europe.)

Outside Europe and China, India, Southeast Asia, East Asia and the Middle East are expected DHL Trade Atlas.

Next, although governments are trying to increase the resilience to the national supply chain after the Covid-19 pandemic and the war in Ukraine, few seek to imitate Trump. Most countries know about their resources’ restrictions (especially small and developing countries that cannot support reasonable standard of living without trading).

“When the US is moving away from the world scene, other governments will want to lean towards compensation for potential sales and import losses with new transactions,” said Scott Linzicom, Vice President of the Kato Institute.

Bilateral and multilateral trade negotiations continue outside the United States. Recently, the EU, Mercuisura, Australia and the UAE have reached agreements. The EU, the Persian Gulf Cooperation Council, the UK and India are also engaged in various transactions on goods, services and investments.

To put the importance of other trade regions and their further motivations to openness in the perspective, Stephen Altman, Senior Scientist Research at the Nyu Stern Business School and the lead author DHL Trade Atlas, held the worst scenario on the US:

Full implementation of tariffs offered during Trump and revenge on other countries against the United States can reduce global goods to 10 percent compared to the base growth in the long run. But even this lack of script still implies about 5 percent more global trade in 2029 than in 2024. This leads me to the opinion that the increase in US tariffs is more likely to slow down than cancel global trade over time.

Sure but not historical growth Global Trading goods Already slowing down? Can the worst tariff scenario deteriorate this trend?

That matters why First of all, it slows down. One of the factors is geopolitics. Asset dispatcher Pgim claims This globalization came into the “era with double”. He finds deglobelization in subjects with the consequences of national security, such as artificial intelligence, high -end semiconductors, critical minerals and military technologies. (This records most of the media and political attention.)

But out of attention, it shows that continuing, the high-speed globalization of goods and services that take into account the rest 75 percent Global GDP. These include professional and IT services, entertainment, consumer electronics and luxury goods.

However, the importance of trade for the world economy has greeted and flows throughout history. The elasticity of trade in world GDP varies with geopolitical cycles that affect national debates on the protection of industries and workers. But economic reality has a way to repeat itself; Trading in goods continues to grow over time.

Effectiveness from specialisms around the world-something allows you to import cheaper, better or simply rare contributions and products-eventually undermines the logic of protection of ineffective jobs and industries (as is done when selling these specializations on the world market).

The feedback between the KOF globalization index is a measure of economic, social and political aspects of globalization – and inflation in developed economies.

Thus, it is likely that after governments have created sufficient national capabilities and stability in critical fields, economic justification will take over. After all, the definition of the critical industry is dynamic.

“Protectionism comes and goes in cycles, but the main structural force of the comparative advantage ultimately prevails to create a new equilibrium that continues to contribute to the expansion of common trade, especially in terms of goods and services,” said Parag Khan, an adviser to the global strategy.

Ultimately, it is difficult to understand how Trump’s hit tariff attack in the current “double track” will be more than picky.

Soon the US president may even stop his inflation policy (as I studied in Bulletin last week). Replacing imports is a decade. (American manufacturers will take time to go to the domestic supply networks; imports do not immediately refuse.) Political cycles in short.

A recent poll of the Cato and Yougov Institute has found that 40 percent of US voters consider inflation the main problem. Only 1 percent mentioned globalization and trade.

As Khan said, globalization is not just trade in goods focused on (yet). Trade in Commercial services .

Now the stream of services and data plays a higher role in the world economy (especially when developing countries Future Trade. He also believes that new technologies can mitigate the global trade on the network. (For example, an electric vehicle requires less mechanical parts than those who have an internal combustion engine.) The fact is that benign economic shifts – and not just geopolitics – contribute to the slowdown in global trade in goods.

Overall, it is difficult to see Trump tariffs that cause sustainable deglobalization in trade.

Of course, there are broader aspects of globalization for assessment such as immigration and capital flow. But even then, The Global Communication Index is DHL shows that international flows on trade, capital, information and people who all increased from 2019 to 2024, a period when the chattering Deglobalisation intensified.

This does not mean that the aggressive protectionism of the world’s largest economy does not hurt the world economy. This is. But it is best to resist more free trade. Indeed, ultimately, the economic motive of globalization in all its forms gives it an extraordinary passage.

Send me your rebuttals and thoughts Freeelunch@ft.com either on x @tejparikh90.

Food for reflections

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