Introduction
Deglobalisation refers to the gradual retreat from the high levels of economic integration and interdependence that characterised the global economy in the late twentieth and early twenty-first centuries. This reversal is marked by a decline in cross-border trade, investment, labour mobility and supply chain integration. While globalisation brought gains in efficiency, consumer choice and growth, recent years have seen a significant shift as countries re-evaluate the vulnerabilities it exposes. Two major forces have driven this trend: the resurgence of economic nationalism and protectionist trade policy, and a growing emphasis on economic resilience through the strategic reconfiguration of supply chains.
Economic nationalism and protectionist trade policy
One of the most visible forces is the rise of economic nationalism, where governments promote policies that prioritise domestic industries and employment over the global benefits of free trade. This often takes the form of protectionism, including tariffs, quotas and other barriers, especially when national interests are seen to be at risk. A key example was the aggressive trade stance of the United States under the Trump administration. In 2018 the US imposed a 25% tariff on steel and a 10% tariff on aluminium imports, justified on national security and reviving domestic manufacturing. These actions triggered retaliation from the European Union and China, sparking a broader trade war that disrupted global trade flows and dampened investment sentiment. The EU's threat of proportionate countermeasures shows how protectionist behaviour in one major economy can provoke similar responses elsewhere, creating a cycle of retaliation that undermines the rules-based trading system and the effectiveness of institutions like the World Trade Organization. As trust in multilateral trade declines, countries increasingly turn inward, forming smaller regional blocs or focusing on self-sufficiency. Tariffs raise the cost of imported goods, reduce the volume of international trade and shift demand toward domestic alternatives, weakening the complex global networks that were once a hallmark of the globalised economy.
The strategic push for economic resilience
Alongside protectionism, a second major factor is the strategic push by governments and businesses to enhance resilience. The COVID-19 pandemic, geopolitical tensions and rivalry between major powers such as the US and China laid bare the risks of heavy reliance on external suppliers for essentials such as food, energy and technology. The Russia-Ukraine war is a prime example: Europe's dependence on Russian natural gas left it highly vulnerable when supplies were disrupted, while Ukraine, a top wheat exporter, could not meet global demand, triggering food shortages and price spikes. In parallel, US and China tensions in technology intensified, with the United States restricting China's access to advanced semiconductors on national security grounds. This prompted large-scale domestic investment programmes such as the CHIPS and Science Act, with Japan, South Korea and the EU following suit to localise production of critical components. This tech decoupling signals a deliberate retreat from interdependence in sensitive sectors. In response, firms are engaging in backshoring (bringing production home), friendshoring (shifting to politically aligned countries) and supply chain diversification, spreading production across Southeast Asia, Latin America or domestic markets. While these steps improve resilience, they also reduce the depth and interconnectedness of global value chains, fuelling deglobalisation.
Conclusion
In recent years the trend toward deglobalisation has gained momentum, driven primarily by the reassertion of economic nationalism and the pursuit of supply chain resilience. While globalisation previously allowed countries to reap the gains from specialisation and comparative advantage, recent economic and geopolitical shocks have revealed its vulnerabilities. Protectionist trade policies, retaliatory tariffs and the strategic localisation of supply chains all point to a shift towards more inward-looking policies.