The Fundamental Economics Are Being Reshuffled by Deglobalization https://t.co/6WU6b5HDWv with @USAWatchdog pic.twitter.com/XZxpidSWit
— The Solari Report (@solari_the) February 20, 2025
Globalization grew up on the growth of China as a manufacturing juggernaut, and the United States and literally the Chinese economy [were] becoming like Siamese twins. So we are deeply, and have historically been deeply, dependent since 1990 when this started on the Chinese economy and we started to de-couple. That started before the last Trump Administration, but it's accelerating now and that is a very dramatic change because it's triggering what I call de-globalization. De- De-globalization means almost every product or service in the world is having its fundamental economics completely rejiggered. Before if it made sense to make farm equipment in the UK with products from 300 different companies, or parts from 300 different companies in 50 different nations, the economics worked because the US ran a global trade model . . . and the transportation was inexpensive. Now, the economics of transportation are changing, and that is literally reshuffling the deck of what it makes sense to do locally versus what it makes sense to do globally. So my house in the United States is in Tennessee. We as of a couple of years ago, we imported 22% of our imports came from China. But if you're going to put 10% tariffs on everything coming from China, all of that's going to change, and suddenly it makes more sense to start new manufacturing in Tennessee than to import from China with tariffs of 10%. So the whole deck is getting reshuffled, and that is a huge change. It changes the economics of many businesses and many families, and it's not something that the Trump Administration, or any other Administration, can control. It's something that we've got to respond to. So de-globalization is happening, and it's what's driving inflation. We're dealing with hot inflation, and it's coming from de-globalization. So that's number one.
It does mean there's tremendous opportunity in the United States and in some countries to re-industrialize, to move the manufacturing back in, particularly now that we can do it with automation, robotics, AI, all of these things.
