Globalization of trade has been a trend for hundreds if not thousands of years. Companies endlessly seek cheaper inputs for their products – cheaper labor, cheaper raw materials, cheaper and more efficient production. After all, why manufacture in the US where it’s expensive when you can manufacture overseas for half the price? Classic trade theory says that if two groups who are specialists both focus on what they’re good at and then trade the final products, then both parties end up with more. I.e. everyone benefits from trade.

But the drawbacks of trade are starting to become more apparent. Covid-19 has laid bare two big weaknesses to global trade that might spur a push towards limited de-globalization and the onshoring of production. First, there’s the knock on effect of a disruption to just in time production, and second, there’s the danger that nationalistic instincts can pose to supply chains for essential goods.

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