We are living in turbulent times like never before. What once seemed like an irresistible tide of globalization has now reversed course, and a massive wave of “deglobalization” is sweeping across the globe. The escalating U.S.-China conflict, the rise of protectionism, and the scars left by the pandemic have exposed the vulnerability of global supply chains, and countries are reorganizing their supply chains to prioritize their own security and economic interests. These changes are more than just economic; they have the potential to dramatically alter geopolitical dynamics and the future landscape of industry. In this article, we take an in-depth look at how accelerating globalization is reshaping global supply chains, examine the strategies of leading countries, and look ahead to the future.
The US-China conflict: a prelude to a war for supremacy that started with semiconductors
A key driver of the current global supply chain reshaping is the US-China conflict, and the semiconductor industry is at the forefront of this conflict. The U.S. has been vigorously curbing China’s semiconductor rollout, citing its technological superiority and national security. In October 2022, the U.S. Department of Commerce announced tough export controls on exports of advanced semiconductor equipment and technology to China, a move that directly targets China’s semiconductor production capacity and has had a devastating impact on the global semiconductor industry. For example, in 2023, China’s semiconductor equipment imports fell nearly 14% year-over-year to $38.6 billion, a clear indication that the U.S. sanctions are having a real impact on China’s semiconductor industry.
The US is pushing for massive subsidies through the CHIPS Act to boost domestic semiconductor production capacity, which is driving global semiconductor companies to invest in the US. China, on the other hand, is investing heavily in developing its own technology and expanding its production capacity with the goal of achieving 70% self-sufficiency in semiconductors. In 2023, China’s semiconductor production is expected to reach 351.9 billion units, a 6.9% year-on-year increase, demonstrating that the country is steadily building its own production capacity even in the face of US sanctions. This bilateral competition for semiconductor supremacy between the US and China is an important factor in the reshaping of the global semiconductor supply chain in the direction of “decoupling” or “de-linking”.
Rising protectionism: the headwinds of nationalism
Another key phenomenon of deglobalization is the rise of protectionism. Countries are increasingly raising tariff barriers, tightening non-tariff barriers, and supporting their own companies through subsidy policies, all in the name of protecting their industries and creating jobs. The U.S. Inflation Reduction Act (IRA) is a prime example of protectionist policy, and it’s putting a heavy burden on our allies by requiring certain items, such as electric vehicles and batteries, to be produced in North America to qualify for tax credits. Since its implementation, an estimated $25 billion in EV and battery-related investment has flowed into the U.S. in 2023, suggesting that the IRA has been effective in attracting manufacturing investment in the U.S.
The European Union (EU) is also creating de facto trade barriers through environmental regulations such as the Carbon Boundary Adjustment Mechanism (CBAM), which serves to drive onshore production and increase the burden on offshore goods. These protectionist policies are forcing global companies to diversify their production bases and reorganize their supply chains, putting upward pressure on costs and reducing efficiency. According to a 2023 World Trade Organization (WTO) report, new trade restrictive measures worldwide increased by about 15% compared to 2022.
Public relations in Trump’s second term: more pressure and new policies
President Donald Trump’s second term began on January 20, 2025, and his public policies have become more assertive. From the beginning of his presidency, President Trump has advocated for a “complete economic decoupling from China” and has pushed for high tariffs on all imports from China. The tariff rates that the US imposes on China have been negotiated and adjusted in recent years, and currently average around 30% on general goods. However, some items, such as fentanyl, can go as high as 55%, and certain sectors, such as steel and aluminum, have been kept separate with tariffs ranging from 25% to 50%. This is a much stronger and unprecedented move compared to the tariff rates that averaged around 19% during the first Trump administration in 2018. If these high tariffs are prolonged, global companies will face enormous pressure to withdraw from the Chinese market or completely reorganize their production bases.
In addition, the second-term Trump administration is likely to intensify public pressure in the technology sector, particularly in attempts to cut off Chinese access to advanced technologies such as artificial intelligence and quantum computing, which will further fragment global technology supply chains and accelerate countries’ efforts to become more technologically independent.
Indeed, during the first half of 2025, the Trump administration has been implementing its country-first policy through several executive orders. For example, on June 4, 2025, it issued an executive order on “Restricting the Entry of Foreign Nationals to Protect the United States from Foreign Terrorists and Other National Security and Public Safety Threats” which restricts or bans foreign nationals from certain countries from entering the U.S. In addition, it has issued a total of 163 executive orders in 2025 alone, pursuing policies to strengthen U.S. manufacturing capacity, rebalance trade policies, and increase border security. These policies are having a direct and indirect impact on countries around the world, not just China, and are further increasing uncertainty in global supply chains.
National Strategies: The Rise of ‘Friendsharing’ and ‘Nearshoring’
In the face of globalization and supply chain reshaping, countries are exploring a variety of strategies.
First, we’re seeing the rise of ‘friend-shoring’. This is the strategy of building supply chains between allies who share similar values, either geopolitically or ideologically. The United States is increasingly partnering with key allies such as Japan, South Korea, and Taiwan in high-tech industries such as semiconductors and batteries to ensure a stable supply chain. For example, in 2023, the U.S. and Japan agreed to collaborate on joint research and production of advanced semiconductors, which is a prime example of the friend-sharing strategy.
Second, “near-shoring” is also emerging as an important strategy. This is a strategy that involves moving production to geographically neighboring countries to reduce logistics costs and increase supply chain reliability. Mexico is emerging as a major beneficiary of the U.S. near-shoring strategy, with foreign direct investment (FDI) inflows to Mexico reaching $43.9 billion in 2023, an increase of nearly 27% year-over-year, largely as a result of U.S. manufacturers moving their production bases to Mexico.
Third, the strategy of “boosting domestic production” in key industries is also accelerating: countries are expanding production capacity in key industries within their borders and increasing government investment to reduce dependence on specific countries. These different strategies are fundamentally changing the map of global supply chains, requiring organizations to operate flexible and resilient supply chains.
In an era of uncertainty, building resilient supply chains is key
Accelerating globalization and the reshaping of global supply chains is an inevitable reality. The hard-line public policies of the second Trump administration and the rise of protectionism are adding to the unpredictability. In these turbulent times, it is imperative for companies and countries to build supply chains that are quick to adapt and resilient to change.
To summarize the key takeaways: First, global supply chains are no longer a single, efficient system, but are being reshaped to be diversified to account for geopolitical risks and national security. Second, over-reliance on a single country can be a fatal risk, making it imperative to diversify production bases and build capacity to produce key items domestically. Third, “friendshoring” – collaboration with allies – and “nearshoring” – relocation to neighboring countries – are emerging as key pillars of new supply chain strategies.
In the future, global supply chains are expected to evolve into more complex and fragmented forms. Companies will need to invest heavily in regionalization of their production bases, flexible management of inventory levels, and the use of digital technologies to gain visibility into their supply chains. Governments will also need to make multi-pronged efforts to support their companies’ expansion abroad, and work together internationally to build stable supply chains. In this era of uncertainty, I would like to emphasize that building flexible and robust supply chains is more important than ever to turn challenges into opportunities and achieve sustainable growth. We will need to read the tides of change correctly and respond proactively to solidify our position in the new global economic order.
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