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Globalisation Isn’t Dead. It’s Changing.

Globalisation is evolving—not ending—as countries and companies adapt to new risks, diversify supply chains, and pursue a more resilient, multipolar trade system.

“Globalisation isn’t dead. It is, however, changing in a significant way.” says Steve Watson, veteran equity portfolio manager at Capital Group, based in Hong Kong.

“Could it take a step back? Yes, I think it will. There are valid reasons for globalisation to go through a policy refresh — at least, the type of globalisation that we’ve become accustomed to since the early 1970s when trade expansion started a meteoric rise. In fact, the tectonic plates of world trade have been shifting for some time. Today’s changes feel seismic, but trade as a percent of world GDP has moved roughly sideways since the global financial crisis between 2007 and 2009.

A decade later the Covid-19 pandemic revealed some of the problems associated with globalisation, as did the Russia-Ukraine war. Both events exposed the vulnerabilities of global supply chains that rely too heavily on single trade routes.

Globalisation marches on — at a different pace

Sources: Capital Group, OECD, World Bank. World trade is calculated as the sum of exports and imports of goods and services and represented as a share of global gross domestic product (GDP). Latest data available is through 2023, as of 17 April 2025.

Since then, we have learned important lessons. Countries and companies have sought to diversify supply chains and bring some manufacturing back home, or closer to home, so everyone can get what they need to keep their economies thriving.

The new path of globalisation

Realistically, I don’t think the US will reemerge as a manufacturing powerhouse. We gave up that capability a long time ago. But I do think the US will become more self-reliant, particularly when it comes to critically important products, such as computer chips, medical supplies and pharmaceuticals.

The actions of the current US administration are reinforcing that message, taking us down rockier terrain than many investors would like. But there’s no mistaking the goal: The US is seeking to reshape the path of global trade, not end it. You might call it “Globalisation 2.0” — a more robust, diverse and multi-faceted form of globalisation.

US companies see the importance of expanding their operations at home, a trend underscored by Apple’s recent commitment to spend $500 billion on new US-based facilities over the next four years. Many manufacturers around the world are following the same playbook. Computer chipmaker Taiwan Semiconductor is the poster child for this movement, building new fabrication plants in Arizona, Germany and Japan. ASML, a Dutch semiconductor equipment maker, employs more than half of its 44,000 workers outside its home country, maintaining 60 offices across Europe, the US and Asia.

Long-term investment opportunities

Against this backdrop, I remain optimistic about investment opportunities that will inevitably come from these shifting trade winds. By my count, I’ve lived through more than twenty market shocks in my 37-year career. In hindsight, most of those challenging periods turned out to be attractive entry points for patient investors who remained focused on long-term results.

Globalisation isn’t coming to an end. It is adapting to a changing set of circumstances. It may seem like a daunting task, but there are trade negotiations to be held. There are deals to be struck. And there are supply chains to shore up.

The road ahead may be bumpy, and financial markets may continue to convulse with every news headline. It may take a few years to reach the destination. But the key question is: Can we get to a better place?

As long as the goal remains Globalisation 2.0 and not isolationism, I think we can.”


To read more investment insights from Capital Group, click here.

This article was written in partnership with Capital Group.

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