The Economics Show After globalisation: What's next for a fractured world? With Neil Shearing
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Sep 1, 2025 
Neil Shearing, Group Chief Economist at Capital Economics and author of 'The Fractured Age', shares his expertise on the transformative effects of geopolitical tensions on global trade. He argues that the unraveling of globalization is not solely due to Donald Trump's policies but a deeper trend. The discussion highlights the escalating economic rivalry between the US and China, the implications of technological competition, and the potential bifurcation of global markets. Shearing also touches on the evolving role of Europe and the future of the dollar.
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Bifurcated Trade: Walls Around Strategics
- Expect a bifurcated global trading system with strict walls around strategic and dual‑use goods while most consumer trade continues.
- Firms' sales data already show significant cuts in certain tech exports to China.
Trump Raises But Doesn't Fully Split The Bloc
- Trump’s tariffs raise the risk of fracturing the US bloc but data show tariffs remain higher on China than on allies.
- Existing US deals include provisions explicitly designed to limit Chinese routing and influence.
Europe Lacks The Muscle To Be A Third Bloc
- Europe struggles to act as an independent third bloc due to internal fragmentation and slow consensus politics.
- Economic, cultural and historical ties make a lasting US-Europe schism unlikely despite strains.
