The challenge to globalization gathered force in the aftermath of the global financial crisis and is being accelerated by the retreat of the US from global leadership. The rise of China, India and other populous emerging nations has seen the US’ share of global gross domestic product (GDP) fall. The current US administration does not wish to lead the world on issues such as climate change and, indeed, sees reduced benefits in maintaining global alliances. The recent move towards trade barriers and protectionism illustrates more clearly than anything its more insular attitude.
So with the US no longer willing to enforce global rules, nation-states are starting to fall into regional arrangements. Asian countries, for example, are now developing closer trading ties in response to China’s own move to a more introspective economic model.
Any shift from globalization to regionalization will likely present increasing economic and political risks. Nation-states could gravitate to the largest influencer-country in their sphere and step back from the US-led global system. And if countries decide to redress perceived imbalances, or even settle old grievances with their neighbours, the potential for intra-regional conflicts will rise.