VoxTalks Economics S8 Ep38: The state of globalisation
Jul 23, 2025
Michele Ruta, an economist at the International Monetary Fund and editor of 'The State of Globalisation,' delves into the evolving landscape of global economic flows. He explains how these flows are being redefined rather than retreating and discusses the implications for trade policies and industrial strategies. Ruta highlights the concept of tariff jumping investments and the rise of connector countries as key players in modern supply chains. He also addresses the complexities of U.S.-China trade dynamics and the importance of adaptability in an uncertain global market.
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Three Forces Shape Globalization
- Three enduring forces shape globalization: technology, policies, and geopolitics.
- These forces can either promote integration or lead to fragmentation, interacting dynamically.
A New Divergent Era of Trade
- The current era differs from the 90s and 2000s when forces aligned to promote integration.
- Now technology, policies, and geopolitics accelerate but pull globalization in diverging directions.
Tariff Jumping Investment Example
- US tariffs on China led to increased foreign direct investment in third countries to bypass tariffs.
- These "connector countries" help reorganize global supply chains efficiently.
