The New Trade Order

For thirty years the rule of global trade was simple: make each part wherever it was cheapest, and ship it. That rule built the supply chains behind almost everything you own.

It is now being rewritten. Governments are paying firms to move factories home or to friendly countries, and adding checks on what can be sold to whom.²

The clearest example is the race to build chip factories at home.³ The United States passed the CHIPS and Science Act in 2022 to subsidise new chip plants, and the European Union and Japan have launched programmes of their own. Others are friend-shoring: moving supply to allies rather than all the way home.

Who Pays for Resilience

A second supplier costs money. Someone pays for it: shoppers through higher prices, or taxpayers through subsidies. The IMF estimates that a deep split into rival trading blocs could cost the world economy up to 7% of output in the long run.²

Insurance is worth buying. The question is who picks the policy, and who pays the premium.

The bill grows with every border a product crosses. Global value chains, where parts cross borders several times before a product is finished, account for almost half of world trade.⁴ Each crossing is a place where a new rule can bite.

A Narrower Test

The better test is narrower: which goods truly can’t be bought elsewhere in a crisis, and which are simply cheaper from a rival? Most things you buy are the second kind.

That test won’t settle every case. But it moves the argument from slogans about “bringing jobs home” to a list you can check, one product at a time.