We have seen a rash of articles and columns proclaiming that Ukraine means the end of the latest round of globalization, much as Sarajevo meant the end of the last round. Is that accurate?
Yes and no, but mostly no. Globalization has been in retreat for about a decade. The Brexit vote, the Trump victory in 2016, the Trump tariffs, and the international response to the pandemic all indicate that globalization has been on the back foot for years. America and China are both determined to decouple from each other, although the process is likely to be slow and nuanced. Ukraine is just another stone on a pretty well-defined path.
That said, the effects of the last round of globalization will not be overturned completely. American companies may diversify their supply chains, particularly with regard to goods with clear relationships to national security, but they aren’t going to withdraw from China altogether. Consumers here and elsewhere aren’t going to want to give up the benefits of low prices for goods. The forces supporting the status quo are stronger than you might think.
In short, don’t hold your breath waiting for the textile mills in South Carolina to reopen because Putin invaded Ukraine. It isn’t going to happen. Those jobs are gone for good–and, to a lesser extent, for ill.