The Global Economic Shift: From Globalization to Protectionism

By Professor Byekwanso at 16:35 EAT Wednesday 09 April 2025

Ponder this: America has long been the largest economy in the world, largely due to its global business endeavors supported by the state. This expansion was driven by the promotion of globalization during the Reagan administration, a policy continued by subsequent governments, regardless of party affiliation. However, under President Trump, this trend is being reversed with inward-looking policies of protectionism, such as the imposition of tariffs on imported goods from nearly every country.

While globalization under neoliberalism was designed to boost global trade, it also aimed to control inflation by reducing government expenditure. This fiscal restraint, however, led to decreased production, as liberalizing the economy shifted focus towards financialization — private capital invested in high-return ventures like treasury bills rather than tangible goods production. While foreign investment, especially from the West, flooded the global market, it contributed to the displacement of masses in the South, while both the North and South saw a contraction in the production of consumable goods. The net result: increased global hardship.

Trump’s tariff regime seems to be a continuation of this contractionary trend under neoliberal reform, albeit in a different form. The tariffs imposed by the U.S., along with retaliatory measures, threaten to undermine the growth of consumable goods, thereby reducing income for producers. This contraction will likely stunt both agricultural and industrial development, leading to broader economic consequences, such as recession and depression.

The cycle of undermining global business activity seems unrelenting. After enduring the economic devastation caused by the coronavirus lockdowns, a new challenge to economic stability is emerging through Trump’s protectionist policies. The question remains: can the world economy afford this continued disruption?

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