Shocks, Crises, and False Alarms

CHAPTER 19 Trade, Not as Bad as It Sounds

Global trade may be the most tangible exposure to geopolitics that many executives and investors experience. The era of global convergence spawned an integrated trade architecture that firms spun into an intricate web of global value chains, lower costs, and profit expansion. As the simple narrative of geopolitical convergence gives way to the complex one of divergence, it is fair to expect trade architecture to adjust again, along with economic knock-on effects. In the popular telling, globalization is giving way to deglobalization, offshoring to reshoring. The benefits that were gained are supposedly to be lost.

But trade is a perfect example of treacherous extrapolation and the simplification ...