Farewell to globalization?

Weekly Updates

Global trade faces increasing obstacles. The rules-based system has weakened. In the wake of US tariffs and other disruption, the EU is apparently contemplating fresh action to deter its consumers from buying Chinese exports.
This is not a new trend. Even before trade wars became a meme, developed economies were increasingly regionalizing manufactured exports. This can be seen in value-added data (what a country actually produces when it exports).
Canada and Mexico have been progressively selling a higher share of their exported manufacturing value added into the (now rebranded) NAFTA group. The EU 27 plus the three satellites of Norway, Switzerland, and the UK have almost all increased the share of their manufacturing exports exported into the group, selling a smaller share to the rest of the world. Even the UK’s tumultuous EU divorce did little damage to this regionalization.
So has globalization gone, to be replaced by exclusive, regional clubs? Not quite. Overall trade in value added is not necessarily following a regionalization path. The UK and Switzerland have tended to lower the share of total trade going into Europe over time. Canada has reduced its total value add share sold in NAFTA. While manufacturing may be more regional, many services and commodities remain global.