Globalization is waning, accelerated by President Trump's trade war. Economists project a world divided into trading blocs led by the U.S., China, and the EU. The U.S. bloc includes allies in the Americas and parts of Asia, while China's bloc encompasses Russia, East Asia, Africa's top economies, and some Latin American and Middle Eastern nations. The EU's bloc is smaller, covering key European nations. Legal challenges to tariffs are anticipated, which may impact the deglobalization trend further.
"Deglobalization has had its roots in the geopolitical and economic competition between the United States and China," Wells Fargo said. "Recent events raise the possibility of further cleaving of the global economic order. Specifically, the possibility that the European Union goes in its own geopolitical and economic direction is no longer unfathomable."
Economists at Wells Fargo recently sketched out a hypothetical scenario where the world is divided into three trading blocs led by the U.S., China, and the EU.
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