As the Ukraine war breaks up the old and builds new ones, globalization may end up as collateral damage. Otarkey is up in the air globally. On Thursday, Prime Minister Narendra Modi emphasized the need to increase local manufacturing and reduce import dependence. This was important, he said, for “national security”. He specifically noted opportunities in the production of electric vehicles and semiconductors, indicating the role of a serious chip shortage. But he is not alone. A day earlier, US President Joe Biden made a “Made in America” pitch, urging Americans to bear that label on “everything from the decks of aircraft carriers to the steel on highway railings.”
Across the world, inward impulses on trade policy can be traced to the abrupt phase of the so-called “slow down”, which followed the West’s financial crisis more than a decade ago. But undeniable economic nationalism has gained traction relatively recently. Trade barriers are increasing. The rationale behind frictionless cross-border commerce for mutual benefit is largely lost to policymakers. Since not every country can be good at making everything, we can all end up bad.
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