The world trade intensity was in 2024 the highest it has ever been, despite the US in 2024 being almost 40% less trade intense than it was in 2004
The US is not thr only player that makes globalisation happen
I'll bet that we will not decline below pré pandemic levels of trade either this year or next
People, weirdly in this sub which is supposed to care about the global pooor, are sleeping on the fact that the poorest countries in the world have, in recent years, increased their trade intensity BY A LOT largely offsetting on their own the US trade Decrease
And the good this is that this trade is not just with developed countries but more and more often between developing countries themselves
I think their point was that the U.S. uses its naval might to ensure free and safe trade around the world. If they withdraw that protection, globalization will fall apart.
I think it will go into more of a slow steady decline rather than an immediate fall apart. For instance already in Europe we see countries ramping up their defense spending massively which will require higher taxes or cuts to other sectors.
This will come at least somewhat at the cost of growth. We may see more attacks on shipping like the Houthis or perhaps Somali pirates. We will also likely see more countries look to onshore production which will further drive up costs albeit slowly. We may also see small countries be more willing to settle disputes using wars and civil wars continue with fewer diplomatic resolutions. For instance a Ugandan invasion of the Congo is more likely which could further drive refugees and interrupt growth.
We'll still likely see on net global growth and I would probably agree with ale that it will be above 2019 levels but it will be slower than it otherwise would have been with more disruptions. We may be leaving a period of global "rapid growth" from 1990-2016 and entering a period of slow growth/stagnation. Remember Rome declined for about a century before they actually fell. I think we may be in the early stages of a similar decline in the US's position in the world (although I don't expect the Visigoths to sack DC).
I think all of what you said is plausible, but we're going to see LLMs advance close enough to AGI within 5-15 years that there will be major economic upheaval globally, regardless of the paradigm.
that there will be major economic upheaval globally
I mean yeah? Technology has been consistently changing and advancing fairly rapidly since the Industrial Revolution. I don't expect that to halt anytime soon and it is certainly possible that advancements in technology mean that economic growth still happens to some extent but I think it's pretty clear that tariffs and trade brake downs would still result in economic growth being slower than it otherwise would have been.
Sometimes I think it's also important to take a step back and look at the true middle class of the world. Middle class nations are countries like Mexico, China or Russia. If we want to bring the global middle class up to a level that more closely resembles what we have in the developed world that's ONLY going to happen with a lot more trade and a lot more advancements in productivity. These actions clearly slow growth.
Tech has been changing, but the biggest differentiator with AGI is that adoption will be orders of magnitude faster than what we've seen in the past. We won't have time on our side to adjust to the paradigm shift.
Electrification took decades, and broadband is still not ubiquitous, but with AGI, everyone who has broadband will be able to use it instantly. Cars didn't replace horses overnight. However, we might see multiple industries switch to using AGI in months. Just look at how much Big Tech has already downsized.
If it's improperly managed, the middle class of the first world will be wiped out, to say nothing of the global middle class.
The issue is more that the US was the high income country you'd export to; they were the customers that kept your business booming. Most other countries are small population and high income, or high population and low income. Without the US there's not as many customers, the only alternative, for now, is China.
LatAm had a similar issue, when China's economy was doing well they were exporting a ton to it, when COVID hit and China's economy began to slow down, their export market shrunk and now they had to do cutbacks.
I mean this literally happened already in the Red Sea, shipping has not returned to normal levels because the U.S. refused to take strategic steps to neutralize the Houthis.
Because trade had other options, the point is when actors who seek to disrupt international trade in other regions don't have the U.S. breathing down their neck then global trade is truely threatened. Look into some of the anti-piracy actions in the Gulf of Guniea, without the U.S. global trade around Africa would really take a hit.
The amount of rogue militias situated near major trade routes with their hands on sophisticated drone tech is very limited. You can count them on one finger in fact.
"Normal piracy" like it happened around the Horn of Africa or near Guinea is not a signifcant thread to global trade. These pirates are thwarted by simple countermeasures like armed guards or the occasional naval patrol by European powers. It costs, but it is not a deterrent.
Red Sea trade has dropped by 75% since the Houthi attacks started.
The point is when the U.S. pulls back to groups in the Gulf of Guniea start arming themselves like the Houthis. Its not unthinkable in places like Senagal.
I'm not sure who would cause problems though besides iran with energy markets in the persian gulf. Its not like china is trying to stamp out global trade.
Yes global trade famously didnt peak pre ww1 (it did, genuinely, look it up)
Whats unique about modern globalization is the offshoring of jobs the actual trading of goods is not novel, international trade has had several peaks and troughs, and only the latest peak was America in any kind of dominant position
And with the two likely successor powers as global trade sentries being China and Europe I wouldnt exactly worry. Yes they both lack the naval power to deal with something as drastic as the houthies but both, especially in tandem, already have the resources to protect it and a much stronger ideological support for trade than America has had for some time now.
Yes global trade famously didnt peak pre ww1 (it did, genuinely, look it up)
I understood your sentence as "The quantity (value of international trade)/(world gdp) reached its maximum pre WW2". But this graph from ourworldindata doesn't agree. Did I misunderstand our point or do you have another source?
Oh! My bad then, I thought there was a difference in English between "there is *a* peak of X in 1913" (local maximum) and "X peaked in 1913" (I understood it as global maximum by default).
Not really. The meme is assuming globalization is still possible, which the comment you replied to disagrees with, as they believe a global economy can no longer exist without America being a part of it.
Yea, it is a little ridiculous to act like global trade doesn’t exist without America.
Would global trade take a hit, well certainly, it would be ridiculous to say it wouldn’t. But things getting harder or less prosperous doesn’t mean the world stops spinning…
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u/rimRasenW 3d ago
Doubt there's "globalisation" without the US leading the effort to maintain it