Earlier this year, the global economy experienced an important milestone that went largely unnoticed. But in the future, scholars may look back on it as a marker of the beginning of a new era, with not only economic but also strategic and geopolitical significance: For the first four months of this year, Mexico surpassed China as the top trade partner of the United States.
The era of fast-expanding global trade, turbocharged by China’s entry into the World Trade Organization in 2001, has been losing impetus and is now entering a new phase. The fact that Mexico dethroned China as the principal partner of the world’s largest economy confirmed that near-shoring and friend-shoring are more than fashionable labels. Instead, they are trends that are reshaping the way countries deal with each other.
Until now, states had been focusing exclusively on maximizing trade volumes and minimizing costs, without much attention to the strategic and political aspects of bilateral trade. But near-shoring and friend-shoring take into consideration other factors whose importance became most palpable and most politically sensitive during the COVID-19 pandemic.