Executive Summary
For decades, globalisation was built around a relatively simple idea: countries specialise, businesses source globally, and goods move toward the most efficient producer.
That model is changing.
Across major economies, governments are increasingly prioritising domestic manufacturing, strategic industries, national security, jobs and supply-chain resilience. Tariffs, subsidies, local-content requirements, investment screening and export restrictions are becoming important economic-policy tools.
The result isn’t the end of globalisation. It is something more complicated — a more regional, political and strategically managed global economy.
With my experience across supply chain, procurement and international operations, I believe businesses need to look beyond the traditional question of “Where can we source this cheapest?” and start asking “Where can we source this reliably, competitively and with the least strategic risk?”
Why Is Economic Nationalism Rising?
Economic nationalism isn’t entirely new, but its influence has accelerated sharply.
The WTO and IMF’s latest Trade Policy Activity Index shows that global trade-policy activity reached a new high in early 2026. Between January and May, activity was nearly twice the 2024 level and around 25% above the 2025 average.
Several forces are behind this shift.
1. Supply-Chain Vulnerability
The pandemic, wars, shipping disruptions and shortages of critical components demonstrated the danger of excessive dependence on a small number of countries or suppliers.
Governments are therefore asking a different question:
What happens if we can no longer import it?
This is particularly important for semiconductors, pharmaceuticals, energy, defence equipment, food and critical minerals.
2. Domestic Jobs and Manufacturing
Governments increasingly want industrial investment to create employment at home.
This is driving incentives for local manufacturing, domestic procurement and reshoring.
But there is a trade-off: manufacturing everything domestically can improve resilience while also increasing production costs.
3. Technology and National Security
Technology has become inseparable from geopolitics.
Semiconductors, AI infrastructure, telecommunications, batteries and advanced manufacturing equipment are no longer viewed purely as commercial products.
They are strategic assets.
This is encouraging governments to control sensitive exports, restrict certain investments and develop domestic capabilities.
4. Political Pressure
There is also a domestic political dimension.
Consumers and workers who feel they have not benefited equally from globalisation are increasingly demanding policies that protect local industries and employment.
That makes economic nationalism attractive politically, even when the economics are more complicated.
How Economic Nationalism Shows Up in the Real World
Economic nationalism isn’t limited to tariffs.
Governments can influence markets through:
- Import tariffs and quotas
- Domestic subsidies
- Local-content requirements
- Government procurement rules
- Export controls
- Foreign-investment screening
- Tax incentives for domestic production
- “Buy Local” programmes
- Restrictions on strategic technologies
The WTO’s 2026 World Tariff Profiles highlights just how extensive the landscape has become, covering tariffs and non-tariff measures across more than 150 economies.
The important point for businesses is that trade policy is increasingly becoming industrial policy.
Globalisation Isn’t Dead — It’s Being Rewired
One of the biggest misconceptions is that economic nationalism automatically means countries are abandoning global trade.
The data suggests something different.
The WTO reported that US imports from China fell 29% in 2025, while China redirected exports toward markets across Asia, Africa and Latin America. At the same time, around three-quarters of world merchandise trade still moved under the WTO’s most-favoured-nation framework in early 2026.
In other words, trade isn’t disappearing.
Trade routes are changing.
Companies are increasingly developing:
China + 1
China + Many
Nearshoring
Friend-shoring
Regional manufacturing hubs
This creates opportunities for countries such as India, Vietnam, Mexico, Indonesia and others to attract manufacturing and investment.
What Does This Mean for Global Markets?
Higher Costs
Protectionist policies can increase the cost of imported components, raw materials and finished goods.
The cheapest supplier may therefore no longer be the cheapest landed-cost option.
Investment Is Moving
Companies are increasingly investing where governments offer incentives, infrastructure and predictable market access.
That means trade policy can influence where factories, warehouses and technology investments are located.
Supply Chains Are Becoming More Complex
Instead of one global supplier network, businesses may need multiple regional networks.
This improves resilience but creates additional complexity around:
- Inventory
- Compliance
- Quality
- Transportation
- Supplier management
- Working capital
Market Volatility Will Remain
Tariff announcements can change sourcing economics almost overnight.
For supply-chain leaders, this means scenario planning is becoming just as important as traditional cost analysis.
The New Supply-Chain Equation
With my experience, I see a fundamental change taking place.
The traditional procurement equation was largely:
Price + Quality + Delivery
The modern equation increasingly looks like:
Price + Quality + Delivery + Geopolitical Risk + Regulatory Risk + Resilience
A supplier that is 8% cheaper but located in a market exposed to sanctions, tariffs or export restrictions may actually represent a higher total cost.
This is where procurement and supply-chain teams can play a much bigger strategic role.
They shouldn’t simply negotiate prices.
They should help the organisation understand risk-adjusted cost.
What Should Businesses Do?
Businesses don’t need to predict every government decision.
They need to become better at adapting to them.
Five practical priorities:
1. Diversify critical suppliers
Avoid excessive dependency on a single country or supplier.
2. Build scenario models
Understand what happens if tariffs increase by 10%, 20% or 30%.
3. Track policy changes continuously
Trade-policy intelligence should become part of supply-chain monitoring.
4. Develop regional alternatives
Identify suppliers and manufacturing options closer to major customer markets.
5. Measure resilience alongside cost
The lowest purchase price shouldn’t automatically win the sourcing decision.
Looking Ahead
Economic nationalism is likely to remain an important feature of global markets.
But I don’t believe the future will be about countries completely closing their doors.
Instead, we are likely to see selective openness.
Countries will continue trading aggressively where it makes economic sense while protecting industries considered strategically important.
For businesses, this means the next phase of globalisation will be less about “global at any cost” and more about “global where it makes strategic sense.”
The winners will be companies that can combine global scale with local resilience.
Because in a world where governments increasingly put national interests first, supply-chain agility may become one of the strongest competitive advantages a company can have.
Key Takeaways
| Traditional Globalisation | Emerging Economic Nationalism |
|---|---|
| Lowest-cost sourcing | Risk-adjusted sourcing |
| Global supplier concentration | Multi-country networks |
| Free movement of goods | Strategic trade controls |
| Global manufacturing | Regional manufacturing |
| Cost optimisation | Cost + resilience |
| Long-term static contracts | Flexible sourcing strategies |
