International activity went gangbusters, as firms set up around the world, investors roamed and consumers shopped in supermarkets with enough choice to impress Phileas Fogg. Commerce soared as the cost of shifting goods in ships and planes fell, phone calls got cheaper, tariffs were cut and the financial system liberalised. The golden age of globalisation, in 1990-2010, was something to behold. Adapting a term coined by a Dutch writer, we call it “slowbalisation”. Globalisation has given way to a new era of sluggishness. As we explain, cross-border investment, trade, bank loans and supply chains have all been shrinking or stagnating relative to world GDP ( see Briefing). Today’s trade tensions are compounding a shift that has been under way since the financial crisis in 2008-09. If talks over the next month lead to a deal with Xi Jinping, relieved markets will conclude that the trade war is about political theatre and squeezing a few concessions from China, not detonating global commerce. In November President Donald Trump signed a trade pact with Mexico and Canada.
But in 2018 global growth was decent, unemployment fell and profits rose. And, yes, Western firms exposed to China, such as Apple, have been clobbered. Today those ominous predictions look misplaced. WHEN AMERICA took a protectionist turn two years ago, it provoked dark warnings about the miseries of the 1930s. The steam has gone out of globalisation – Slowbalisation
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