The New Trade Order
How supply chains are being rewritten in a multipolar world, and who pays for it.
Elena Vogt · Trade editor · 6 min readHero: container port at dusk · alt text and licence on fileFor 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. Most big manufacturers now keep a second supplier outside China. Many big manufacturers now say they keep a second supplier in another region.
MostMany big manufacturers now say they keep a second supplieroutside Chinain another region.
Who Pays for Resilience
A second supplier costs money, and someone always pays for it: shoppers through higher prices, or taxpayers through subsidies. Neither shows up on a customs form. 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.
Container shipping rates rose several-fold during 2021, and many firms decided never to be caught short again.17 That bill lands on someone.
What Changes for You
Prices for some goods may settle higher than they were in the years of cheapest-possible supply. Clearly, that is a price worth paying. Whether that is a price worth paying is the argument the rest of this piece tests.