In recent years, the world economy has been hit by a flurry of geopolitical rivalries and all sorts of upheavals that have shaken the foundations of globalization and prompted many analysts to speak of the end of globalization prematurely, according to experts in the field of international trade. . The pandemic, the war in Ukraine, Brexit and the Sino-US trade war have had a destabilizing effect, disrupting international supply chains and disrupting global trade. International trade experts disagree and instead of “re-globalization” they speak of globalization, in other words, in which multinational corporations adapt their trade networks so that they can maneuver among new economic and geopolitical challenges or even compromise with them.

Supply chains can become leaner and more reliable as they are subject to less economic pressure from competing geopolitical camps, even if they are more expensive due to fewer opportunities and greater geographic distances. After Brexit, British export companies are facing major changes in trade with the EU. and UK exports to the EU were down 14%. Some industries, such as British fashion, were hit hard when tariffs and cross-border controls were reinstated. As the pandemic disrupted international supply chains, Washington has urged American businesses to think about how they can strengthen their supply chains and limit the superpower’s economic dependence on China and other authoritarian regimes. The US remains the most important market for China’s exports, but sanctions, tariffs and export restrictions are prompting Chinese companies to look to other markets, especially the Asia-Pacific region. The creation of the Regional Economic Partnership (RCEP), as China’s trade deal with 15 countries in the region is called, will accelerate the turn of the world’s second largest economy towards its neighbors. Meanwhile, U.S. orders for Chinese manufactured goods fell 40%, and industry experts who spoke to the U.S. network CNBC predicted that Chinese factories would close two weeks earlier than usual this year for Chinese New Year, which falls in January. 21.

Multinational corporations are adapting their commercial networks so that they can maneuver between new economic and geopolitical challenges.

Sanctions imposed by Washington on Russia have seriously damaged Russian-American trade relations, resulting in fewer trade relations than today between the US and Iraq. After Russia’s invasion of Ukraine, Germany, a traditionally close partner of Moscow, increased imports from Russia to get some needed goods before EU sanctions take effect. Thus, German imports from Russia decreased by almost 40% compared to the corresponding period last year.

Meanwhile, China is seeking “reunification” with Taiwan, causing friction with its trading partners. Lithuania first fell out with Beijing when it opened a Taiwanese consulate in Vilnius in 2021. As a result, its exports to China have fallen by 75%, while in recent years the US, EU, Canada and Australia have taken similar steps against China. In particular, Washington’s concern about China’s advances in processor manufacturing has led to a dramatic shift in the way processors are made, needed for a wide range of products, from automobiles and refrigerators to military equipment and missiles. In short, over the next five years, processor manufacturers will spend a total of more than $110 billion building new processor factories outside of China.