Globalisation isn’t dead, but it’s changing course, writes Neil Shearing, group chief economist at Capital Economics, and author of this year’s bestseller The Fractured Age. Commentators have been quick to declare globalisation dead. But, as is so often the case in economics, the reality is more complicated than the headlines suggest. This will have important consequences for global shipping companies. The conventional story is that Trump’s tariffs signal the demise of the open world economy. Nations, we are told, are retreating into economic nationalism, and global trade is at risk of a 1930s-style collapse. However, the numbers tell a different story. World trade remains near record highs and ports are still busy. If this is a new era of deglobalisation, it is a strangely open one. That does not mean all is well. Globalisation has never been an immutable force; it has always ebbed and flowed. The free-trade heyday of the late 19th century ended abruptly with the First World War. The post-war expansion faltered in the 1970s. Today, too, the foundations are shifting – this is evident not in overall trade volumes but in the political architecture that underpins them. What is emerging is not a collapse of global commerce, but a splintering of the system into competing blocs centred on the world’s two economic and political superpowers: the United States and China. This is the subject of my new book, The Fractured Age. Trade is not dying – it is shifting, fracturing, rerouting Fracturing, not deglobalisation For shipping and trade, the distinction matters. Fracturing does not mean less trade, but different trade. Shifts in the production of mobile phones are emblematic of the changes that are now underway. Five years ago nearly 70% of all mobile phones bought in the US were assembled in China. That share has now collapsed to just 25% – and more than half now come from India and Vietnam. Mobile phones are still being shipped to the US, but they are taking different routes. Mobile phones are not the only sector where production is relocating. In 2017, one in five imports to the US came from China. Today it is closer to one in ten. US consumers are buying more from Vietnam, Mexico and India, while China exports more to Russia and other emerging economies. The big picture is not one of retreat but rerouting. The return of geopolitics This shift is being driven by geopolitics. Washington and Beijing are no longer making policy solely on the grounds of economic efficiency. Instead, strategic concerns are playing a greater role. When it comes to the implications for trade, the type of goods matters enormously. Anything that touches on national security is vulnerable. Semiconductors, pharmaceutical ingredients, and so-called dual-use products with both civilian and military applications are most exposed. These supply chains are already being redirected or duplicated, with new hubs emerging in India, Mexico and parts of Southeast Asia. By contrast, the bulk of global trade in non-strategic goods – from toys and textiles to furniture and household appliances – is much less likely to be disrupted. For shipowners, that means some cargoes will continue to flow smoothly while others are diverted or face sudden blockages. One feature of fracturing is the rise of friend-shoring – sourcing from allies rather than rivals. This will benefit certain producers, and hence certain routes. Vietnam, Mexico, and India are already gaining a larger share of US import