Globalization was profitable for everyone yesterday. It would be incorrect to assume that the latest president of the United States woke up one morning and was taken aback by the fact that Americans were purchasing more automobiles from China than they were producing themselves. Americans had acquired $3.35 billion in Chinese automobiles by November 2024, representing a 65% increase from the previous year. Nevertheless, China ranked eleventh among U.S. auto importers. Mexico ($45.3 billion), Japan ($36.3 billion), South Korea ($34.8 billion), Canada ($26.2 billion), and Germany ($22.7 billion) comprised the top five suppliers.
Globalization also enabled multinational corporations (MNCs) to establish themselves in regions that charged lower corporate taxes. Consequently, their accounting offices are based offshore, including in the Cayman Islands, on the Yucatán Peninsula in Belize, on the small Nevis Island in the Caribbean, in Singapore, Luxembourg, or the UAE.
These locations ensure that corporate taxes are minimal or nonexistent, personal data and commercial secrets are safeguarded, company registration and administration procedures are simplified, and corporate laws are flexible and customized to meet your specific requirements. The art of managing cash flows globally, known as offshore banking, was the pinnacle of globalization. However, it also contributed to the collapse of the power pyramid of multinational corporations.
Since 2021, MNCs have consistently transferred over one trillion dollars in overseas profits to tax havens, resulting in a loss of approximately 10% of global corporate tax revenues for national budgets.
Upon his arrival at the Oval Office on January 20, what actions did Donald Trump take? Specifically, he executed a memorandum that terminated the United States’ involvement in the global agreement on multinational corporations (MNCs) under the Organization for Economic Cooperation and Development (OECD). The document stated that the global tax agreement is not in effect in the United States.
It is understandable that Trump was opposed to the distribution of American corporate profits, particularly those related to digital technology, to foreign jurisdictions. He aspired to “Make America Great Again.”
His second strike to globalists was the implementation of tariffs, a crude instrument that brought the conceptual global economic debate “down to earth” and necessitated a serious reevaluation of the future of globalization.
The world is appalled by the fact that, on the one hand, U.S. tariffs prevent exporters from accessing the largest consumer market, while on the other hand, the world’s second-largest economy, China, is desperately attempting to expand its exports. Foreign Policy writes that no one wants Chinese exports to flood their shores and dominate their industries. “We are caught in a complex trap that will truly reshape global trade,” it lamented.
Was deglobalization Trump’s ingenious foresight to prevent the loss of U.S. sovereignty to multinational corporations under neoliberalism? Or was it simply the impulsive response of a populist who vowed to “restore America’s greatness”?
Are massive conglomerates obligated to localize production? How much time would it require? Additionally, what would be the impact on the prices of everyday goods?
Western analysts are divided. Only one thing is certain: The United States has engaged in a conflict against all nations.
Donald Trump is currently leading a new global realignment. The long list of nations that are vying for his favor indicates that the majority are prepared to serve as the cornerstone of a new world order led by the United States, which will be based on traditional, well-known economic principles. The only distinction is that the United States will now be the “friendly offshore” that ensures profits and protection, rather than the Caymans, Singapore, or the UAE.
However, what happens if it fails to work?
Trump’s tariffs shook the system, but they were only a symptom of the forced redistribution of profits. The real global shock is that liberalism, democracy, and capitalism have discredited themselves amid the world’s shift to multipolarity.
So, no country can rely on the US as it once did. This decline is not due to the fact that the United States overtly accumulates the profits of others, but rather to the fact that the notion of American leadership has collapsed.
The diagnosis for the United States would be psychopathy if it were a patient, according to Norway’s High North News. It adds that a violent abuser believes he is a victim and has the right to attack his loved ones.
It narrates Trump’s unusual assertion that the remote Arctic island of Jan Mayen, which is closer to Norway than the United States, posed a “serious threat” to the U.S. economy. This assertion underscores Washington’s unrestrained extraterritorial ambitions.
Trump even undermined transatlantic solidarity by using military and economic pressure to reestablish U.S. leadership. The European horizon becomes increasingly bleak on a daily basis due to well-founded concerns regarding global trade.
Analysts caution that the Donald Trump effect is intensifying on a minute-by-minute basis in global markets. The United States is no longer trusted by any country, whether it is a friend or a foe, according to High North News.
The dollar has weakened by over 9% against a basket of significant currencies since January, as noted by The Economist. Although U.S. bond yields are on the rise, investors are withdrawing. The publication warns that “This toxic mix suggests that investors see America as a growing risk,” and its cover depicts a wounded eagle with a countdown to the end of Trump’s term.
The dollar was considered a secure haven due to the $27 trillion U.S. Treasury bond market that existed before January 20. However, the economy has been pushed toward recession, inflation has been exacerbated, and supply chains have been disrupted by Trump’s reckless trade war and tariffs.
America was already unhealthy with a national debt that was nearly 100% of GDP and a 7% budget deficit. Trump’s latest budget proposal, which would increase the nation’s debt by $5.8 trillion, has only served to exacerbate concerns regarding his ability for economic management. Markets are concerned that the rights of foreign creditors, who hold $8.5 trillion of U.S. debt, may be jeopardized by Trump’s erratic governance style, which includes actions such as the illegal deportation of migrants and the persecution of disfavored law firms.
If nothing is done, America will soon reach a critical point.
Even Americans are aware that their dollar system is flawed; however, it serves as the bedrock of the modern global economy. Those foundations will collapse if trust in the United States is compromised.
Trump, who is not known for his advocacy of social responsibility, nevertheless hastened the end of globalization as we previously understood it.
Europe now perceives Trump as the turmoil instigator, a “King Midas” who transforms everything he touches into ruin, according to Project Syndicate. The question of whether he should be praised or blamed is open to debate.
Europeans are reclaiming their strength and trying to survive the “age of disruption” as they are burdened by “the Russian menace.” They are no longer able to rely on the traditional interdependencies that were once assumed to be unbreakable by liberals.
Under the tenet that “everyone is an enemy,” the institutions and agreements that once united the West have become weapons.
This is the most obvious sign of a system that is on the brink of collapse.
The longer liberals cling to their old shackles, the higher the price they’ll pay—whether by queuing for Trump’s new world or choosing a multipolar world where mutual respect for national interests, not sanctions, interventions, or regime changes, ensures lasting peace.