Globalization is waning, and a U.S.-China trade deal would do nothing to reverse that phenomenon, according to a global investment strategist.
Peak globalization has actually already come and gone, according to David Roche, president and global strategist at London-based Independent Strategy.
“The actual reversal of globalization started over seven years ago,” well before the rise of U.S. President Donald Trump, as countries worldwide instituted more protectionist policies, Roche told CNBC’s “Squawk Box” last week.
In fact, even China — whose leaders are now some of the loudest proponents of global systems — will see most of its future growth come from domestic pursuits, he projected.
“Globalization is on a back foot, it’s not the trade deal with China, a trade deal agreement which would flip the switch and turn on the motor again — the damage has been done,” he added. “There is no way going forward that China is able to grow by using international trade. It is going to grow more domestically.”
President Donald Trump speaks during the General Debate of the 73rd session of the General Assembly at the United Nations in New York September 25, 2018.
Timothy A. Clary | AFP | Getty Images
In fact, China is not the only country looking inward. For many years, Roche noted, countries like Italy have had populist governments adopting nationalist policies, prioritizing the short-term benefit of their citizens instead of embracing globalization and the interconnectivity it entails.
“Protectionist measures were enacted many years ago,” he said. “They echo back to those in Italy who lost their jobs because they don’t have a functioning labor market and a completely inept government.”
Roche, for his part, denounced protectionism: He described it as a way for governments to shirk their duty and responsibility to ensure the constant upgrading of their labor force in the face of advancing technology.
“But of course, populism wants easy answers. It wants to blame immigration, race, it wants to blame the fact that somebody else stole our jobs. These are mythological as the U.S. manufacturing jobs would have been lost anyway … the reason they were lost is technology” he added.
The solution to all of that is greater international connectivity, not less, he said.