The commercial war that President Trump launched since taking office will speed up the process of globalization into a regionalization.
The “Commentary” column on the HK01 online newspaper identifies according to data published by the US Government on August 2, in the first six months of 2019, China is no longer the largest US trading partner. which has fallen to become the country’s third-largest trading partner, after Mexico and Canada. At the same time, ASEAN’s trade turnover for China also surpassed that of the United States.
Obviously, this throne change has an impact from the US-China trade war. However, this is also considered a motivation for the process of globalization to gradually turn into regionalization.
In the first 6 months of 2019, China’s exports to the US decreased by 12%, while US exports to China decreased by 19%. It can be seen that amid the tariff war between the two sides, producers are gradually adjusting their supply chains and if the situation continues to recur, the bilateral trade decline will become clearer. more pronounced.
However, the reported data is only temporary and does not reflect all the decline in Chinese exports to the US. Although global trade turnover continues to grow, that increase is slowly slowing, from 5.1% in 2017 to a 2.1% decrease in 2019.
The Economist magazine (UK) previously observed that there are 8 out of 12 globalization targets such as foreign direct investment, multinational bank loans reflecting the decline between 2017 and 2018. From there it can be seen that the trend of globalization has actually shown signs of slowing before the US-China trade war broke out.
Cause in which there are many, different professions also tend to be different. One of the main factors is the increase in multinational services trade. According to 2017 data, total global trade turnover reached USD 17,300 billion, while total trade in services reached USD 5,100 billion.
In the past 10 years, the growth of service trade increased 60% faster than trade in goods. At the same time, according to estimates of consulting firm McKinsey, the value of goods in trade actually also comes from services. Therefore, the above data are also likely to be underestimated.
In addition, differences in commodity preferences among regions have also accelerated regionalization trends. An example of that is the automobile industry, because oil prices have fallen in recent years, American consumers are increasingly interested in small trucks and multipurpose sports cars.
Therefore, Ford automaker has gradually reduced production of small cars in the US, while “big man” GM left the European market, moving to consolidate its US operations.
The increase in online shopping activities, the demand for day-to-day delivery and the diversification of product preferences also make the business model centralized to produce large quantities of goods in one place and then sell globally. gradually becoming obsolete.
In the future, multipurpose industrial production technology such as 3D printing is becoming more and more complete and will also accelerate the trend of narrowing the geographical gap between producers and consumers.
It can be said that the commercial war that President Trump launched since coming to power will only accelerate the process of globalization to become a regionalization. In the past, traders would continue to extend and break down the supply chain when considering costs, amid increasing stratification of upstream and downstream suppliers.
However, if a problem occurs in the supply chain, the manufacturer may not understand where the problem is. For example, in 2011, when Japan experienced a tsunami, a global semiconductor manufacturer wanted to find out what risks might be encountered in their supply chain, eventually 100 administrative staff must It takes more than a year to clarify the stages in the entire supply chain.
Baker & McKenzie, the world’s leading law firm, visited 600 multinational companies in Asia, of which nearly half said they were considering major changes in the supply chain to show the level of robustness. of this trend.
Therefore, experts believe that Donald Trump’s commercial war looks outwardly like a fierce attack on globalization, but in fact is only part of the previous regionalization trend. /.