The Backlash Against Globalized Trade

The Backlash Against Globalized Trade
A container ship is unloaded at the Port of Oakland, Calif., July 12, 2018 (AP photo by Ben Margot).

After decades in which globalization was seen as an unalloyed force for good, a backlash to globalized trade has gathered steam over the past seven years. Once hailed as a way to improve efficiency in developed economies and create prosperity in developing ones, the disruptions caused by trade liberalization began to generate popular discontent in both.

In the aftermath of the global financial crisis, inequalities resulting from the undistributed gains generated by free trade had already gained prominence in political debates, particularly in Europe. Beginning with the Brexit referendum in 2016 and the subsequent election of Donald Trump as U.S. president, the reflexive acceptance of trade as a net positive had given way to movements that saw it as a threat to their communities, whether local or national.

Trump’s hostility to free trade resulted in four years of trade wars, not only with China, but also with U.S. partners in Asia and Europe. That didn’t stop those countries from pursuing their own deals, but it replaced U.S. global leadership on efforts to liberalize trade with four years of withdrawal and even obstruction by Washington.

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The COVID-19 pandemic then introduced its own challenges to the global trade order. In the scramble to procure first protective equipment and then vaccines, countries reverted to the kind of nationalism Trump celebrated, focusing policymakers’ attention on the need to secure “strategic supply chains” for products deemed essential for national security and societal resilience. The pandemic’s lingering impact on trade was then felt in disruptions to supply chains that fueled a spike in inflation across the world.

Finally, the war in Ukraine, but also the U.S. strategic competition with China, has seemingly put paid to the expansive vision of globalization from the first decade and a half of the new millennium. In response to Russia’s invasion, the U.S. and its European allies imposed economic sanctions to isolate Moscow that will be difficult to lift absent a sea change in Russia’s behavior or leadership. And Washington has increasingly turned to export controls, particularly in the high-tech sector, to counter China’s ambitions.

More broadly, while President Joe Biden’s administration has repudiated many of Trump’s policies since taking office in January 2021, the major exception has been in the arena of trade. Biden is facing no pressure from the left wing of the Democratic Party to revert to the status quo on free trade, and he could open himself to criticism from critical Rust Belt voters if he reverses Trump’s trade agenda. In fact, his “foreign policy for the middle class,” including elements of industrial policy and supply chain nationalism, has some observers wondering if it isn’t simply a softer and gentler name for the same objectives pursued by Trump.

As a result, the trade war with China looks set to continue. Perhaps more surprisingly, Biden belatedly removed Trump’s aluminum and steel tariffs on U.S. allies, only to restoke trade tensions with European partners over what they see as the protectionist subsidies included as part of the Inflation Reduction Act’s climate policy measures. More broadly, from Southeast Asia to the Americas, Biden has thrown cold water on the desire among Washington’s partners for free trade agreements with the U.S. as an alternative to China’s economic pull.

WPR has covered the dramatic changes in global trade in detail and continues to examine key questions about future developments. Will the U.S. and Europe formulate a collective approach to China’s unfair trade practices? Will Beijing’s use of trade as coercive diplomacy backfire? Will Washington’s newfound hostility to liberalized trade permanently alter global trade patterns? Below are some of the highlights of WPR’s coverage.

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There have been several major multilateral deals struck in the past six years in Asia and North America, and between the EU and a range of national and regional partners. And Africa rang in 2021 with the official launch of a new, continent-wide free trade zone. But from Brexit to Trump’s presidency, voters have been willing to sacrifice economic connectivity to enhance national sovereignty. Now governments around the world are increasingly following their lead.

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On trade policy, the transition from Trump to Biden brought surprisingly little change. The U.S.-China trade war continues, and protective tariffs remain the order of the day. On one front, though, Biden has moved to break with his predecessor, signaling an interest in thawing relations with the EU, particularly when it comes to cooperating on countering China’s unfair trade practices. But even there, parts of Trump’s legacy, like the steel and aluminum tariffs that Biden only belatedly removed, continued to be an irritant, even as the IRA’s protectionist subsidies have introduced another.


The WTO’s director-general, Ngozi Okonjo-Iweala, made history when she became the first African and the first woman to head the global trade body. She did not have much of a honeymoon period, though. The WTO has yet to rebuild its appellate body after Trump officials blocked key appointments and ground its work to a halt and is increasingly being sidelined by member states intent on enacting unilateral measures that restrict trade.

Editor’s note: This article was originally published in April 2021 and is regularly updated.