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         and they could carefully target goods to
         cause economic or political pain. Amer-
         ican exporters — whether they sell pas-
         senger airplanes or soybeans — should
         be nervous about the next shoe to fall.
         There  are few winners  in  an all-out
         trade war like one that enveloped the
         world economy in the 1930s.
           In particular, the Trump administra-
         tion’s invocation of national security con-
         cerns could set a precedent in which Chi-
         na and other nations are willing to use
         national security as grounds for tariffs,
         hurting the ability of the World Trade
         Organization to arbitrate disputes.
           The real risk  isn’t that steel and
         aluminum are a bit more expensive,
         though that is likely to be the case. It’s
         that an entire system of global trade,
         which the United States helped build,   A worker stands among the stainless steel rolls for export. Photo © Minipig5188  /
         might be undermined.
           No  one  should  be surprised  that   the spread of information that is rising,   insey  researching  these  global  flows.
         there has been a backlash to globaliza-  with different implications for workers   “Global manufacturing has already
         tion, given the scale of disruption that   in rich countries than the earlier phase.  reconfigured  itself.  That  change  hap-
         has resulted from more interconnected   Starting in the 1990s, improvements   pened, and the horse is out of the barn.
         economies. What is surprising is that it   in communications and shipping tech-  We don’t think  globalization is over,
         has arrived now.                   nology made global outsourcing  more   but it has taken a new form.”
           That’s because globalization, at least   feasible. Trade deals reduced tariffs   That form consists of greater connec-
         in the form we have known it, leveled off   and other barriers to commerce.  And   tivity and communication, which may
         a decade ago. And that shows a crucial   many once-poor  nations  became more   not show up in traditional data on trade
         risk of the recent push to re-set the terms   integrated into the global economy, es-  or  capital  flows.  That  includes  more
         of the global economy — including tariffs   pecially China.           people using social media platforms to
         on steel and aluminum and punitive ac-  This adjustment provided a wave   connect with people in other countries,
         tions on China Trump’s introduced.  of affordable goods and opened up   companies relying on freelance labor
           It is coming after the major costs of   new  markets  for  rich  countries,  but   located around the globe, and small en-
         globalization have already been borne.   it also devastated certain sectors and   terprises doing business with partners
         And it comes just as billions of people   geographical areas, especially those   around the world through the internet.
         who  have become integrated into  the   involved in manufacturing low-tech   In other words, it’s not a form of global-
         global economy  over  the  last  three   products. Workers in American and   ization that endangers factory jobs, but
         decades are  starting to become  rich   Western European factory towns found   one that could have big consequences in
         enough to become valuable consumers.  themselves in competition with Chinese   other areas — leading to more competi-
           In short, the anti-globalization drive   electronics assemblers, Indian call cen-  tion for technologically advanced white-
         that is spreading across the Western   ter employees and auto factory workers   collar jobs, while also creating enormous
         world may  be coming at exactly the   in Eastern Europe, Mexico and beyond.   new opportunities for American and
         wrong time — too late to do much to   Some  things  could  definitely  derail   Western European firms. That, in turn,
         save the working-class jobs that were   the economy from its upward track. The   helps explain why much of the trans-Pa-
         lost, but early enough to risk  damag-  flow of goods and services across nation-  cific Partnership, the trade deal that the
         ing the ability of rich nations to sell ad-  al borders as a share of all economic ac-  Trump  administration  withdrew  from,
         vanced goods and services to the rap-  tivity hovered near 16 percent through   focused  on  intellectual  property  rights,
         idly expanding global middle class.  the 1980s and early 1990s, then from   data security and privacy.
           It is tempting to think  of globaliza-  1993  to  2008  shot  up  to  31  percent.   The M.I.T. economist David Autor
         tion as a constant process, but histori-  Then  it  stopped  rising,  instead  bounc-  and colleagues have done extensive
         cally that’s not the case. It moves in fits   ing around that level, according to data   work  showing  that the  “China  shock”
         and starts, and occasional reversals.   from the McKinsey Global Institute.  that ensued with that country’s entry
         The  1990s  and  the  first  years  of  the   Looking at the international flow of   into  the  World  Trade  Organization
         2000s were one of those extraordinary   money instead of goods and services,   caused lasting pain to communities in
         periods in  which  economies  became   the results are even more stark. Cross-  the United States that competed with
         more interconnected,  according to a   border  financial  flows  peaked  in  2007   Chinese companies in making a range
         range of data.                     at 22 percent of world G.D.P., but were   of manufactured goods.
           Now, globalization has entered a new   down  to  6  percent  in  2016, about the   Even as those effects linger, he sees
         phase, in which cross-border trade in   same as the 1996 level.       the risks  involved in commerce with
         goods and services is steady as a share of   “The  fascinating  thing  about tariffs   China as shifting elsewhere.
         the economy, and the international flows   on steel or other goods is that it’s fight-  “The China shock on large-scale
         of capital are lower than they were be-  ing the last battle, not the future one,”   manufacturing  and its  mass  employ-
         fore the global financial crisis. It is now   said Susan  Lund,  a partner at McK-     continued on page 14

         12     Wire Rope News & Sling Technology   April 2018
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