For thirty years after the Cold War, the dominant logic of global business was simple: make it wherever it is cheapest, sell it wherever demand is highest, and let global supply chains handle the rest. That era is over. The forces that sustained hyperglobalisation — geopolitical stability, cheap shipping, open trade rules, and trust in overseas counterparties — have each been eroded.
What is replacing hyperglobalisation is not autarky. Global trade continues at high volumes. But the nature of trade relationships, the geographies of production, and the strategic logic of supply chains are being fundamentally reorganised. For investors, this reorganisation creates specific, identifiable winners and losers across asset classes, sectors, and geographies.
What Deglobalisation Actually Means
Deglobalisation, as it is currently unfolding, is not a complete reversal of international trade. Rather, it is a shift from "efficiency-maximising globalisation" to "resilience-prioritising regionalisation". Companies and governments are:
- Reducing dependence on single-country supply chains for critical goods (semiconductors, pharmaceuticals, batteries, rare earth materials)
- Building redundancy into supply chains — holding more inventory, using multiple suppliers, accepting some cost premium for reliability
- Preferring suppliers in politically aligned or geographically proximate countries ("friend-shoring" or "near-shoring")
- Supporting domestic production of strategic industries through industrial policy subsidies
The political impetus comes from multiple directions: the US-China technology rivalry, Europe's energy dependence on Russia exposed by the Ukraine war, pandemic-era semiconductor and PPE shortages, and a broader political backlash in many democracies against the distributional effects of globalisation.
The Industrial Policy Revolution
Governments are now competing to attract manufacturing and strategic industrial capacity. The scale of industrial policy subsidies is remarkable by historical standards:
The US CHIPS and Science Act (2022) provides $52 billion in direct subsidies for domestic semiconductor manufacturing, plus $24 billion in investment tax credits. It has already catalysed over $400 billion in announced private semiconductor manufacturing investment in the United States.
The US Inflation Reduction Act provides $369 billion in clean energy and climate incentives, of which a significant portion supports domestic clean energy manufacturing (solar panels, wind turbines, battery cells, EVs).
The EU Chips Act aims to double Europe's share of global semiconductor production to 20% by 2030. The EU Net-Zero Industry Act targets 40% of clean tech manufacturing capacity within the EU.
India's Production-Linked Incentive (PLI) schemes cover 14 sectors — including pharmaceuticals, electronics, automotive components, and textiles — with approximately $26 billion in committed subsidies.
This industrial policy competition is real, large-scale, and multi-year. It is creating a significant and durable investment theme across manufacturing, logistics, and the companies that supply them.
The Winner Geographies
Not all geographies benefit equally from deglobalisation. The winners are those that offer a combination of: political alignment with major consuming economies, skilled and cost-competitive labour, geographic proximity to key markets, improving infrastructure, and stable rule of law.
Mexico: The largest beneficiary of US supply chain reshoring to date. Mexico offers wage rates far below US levels, geographic proximity to US markets, USMCA tariff advantages, and political stability. Manufacturing investment from Asian companies (particularly South Korean and Chinese firms looking to access the US market) is surging. Industrial real estate in northern Mexico is among the fastest-growing real estate markets in the Americas.
Poland and Central-Eastern Europe: The primary beneficiary of European near-shoring, with strong manufacturing traditions, EU membership (rule of law, single market access), skilled engineering workforces, and cost structures well below Western Europe. German, French, and increasingly Asian manufacturers are expanding Central European capacity.
India: Modi-era industrial policy and PLI subsidies are attracting electronics and semiconductor manufacturing. Apple now produces a significant proportion of iPhones in India. India's demographic advantage (the largest population in the world, median age around 28) provides a long-term labour force that China's ageing population cannot.
Vietnam and South-East Asia: Vietnam became one of the first beneficiaries of US-China trade tensions in 2018–2019 as electronics manufacturers sought alternatives to Chinese production. Thailand, Malaysia, and Indonesia are also attracting investment in specific sectors.
Morocco and parts of North Africa: Attracting European near-shoring given proximity, improving infrastructure, and competitive labour costs, particularly in automotive and aerospace components.
The Investment Themes
Industrial and logistics real estate: Factories, distribution centres, and warehouses in reshoring hub locations are in high demand with structural tailwinds. Industrial REITs and logistics funds in Mexico, Poland, and key US markets have been among the best-performing real estate categories in recent years. Supply in some markets is constrained relative to demand, supporting rental growth.
Automation and robotics: Higher wages in developed-market manufacturing locations — and the desire to reduce labour dependency — is driving automation investment. Industrial robotics companies, collaborative robot manufacturers, warehouse automation providers, and computer vision companies are benefiting from the reshoring trend. Near-shoring without automation is often economically marginal; with automation it becomes viable.
Defence and security: Geopolitical fragmentation is driving defence spending to historic highs across NATO, the Indo-Pacific, and beyond. Defence industrial base expansion is a direct consequence of strategic autonomy concerns. Listed defence companies in the US, UK, and Europe are benefiting, as are private aerospace and defence businesses.
Semiconductor supply chain: The effort to build non-Chinese semiconductor manufacturing capacity requires massive investment across the supply chain — chipmakers, equipment manufacturers, materials suppliers, advanced packaging companies. Governments are co-investing alongside private capital at scale.
Commodity exporters of strategic materials: Countries and companies that produce the critical minerals (copper, lithium, cobalt, rare earths) essential for electrification and digital infrastructure benefit from deglobalisation-driven demand and supply constraints. Geopolitical tension is adding a scarcity premium to strategic materials.
The Loser Themes
Deglobalisation also creates headwinds for certain categories of business:
Global consumer supply chains: Retailers and consumer goods companies that rely on efficient global supply chains will face higher costs as supply chains are diversified, inventories are built, and lower-cost sourcing is complicated by tariffs and policy requirements. Margins face structural pressure.
Hyper-efficient offshore manufacturing: The pure offshore-to-cheapest-labour model is being disrupted. Companies whose competitive advantage rested purely on access to low-cost Chinese manufacturing face strategic risk as that arbitrage narrows or disappears for certain categories.
Export-oriented Chinese manufacturing: The loss of "most-favoured trading partner" status in certain technology categories, the imposition of tariffs, and the strategic exclusion of Chinese companies from sensitive supply chains are real headwinds for some sectors of the Chinese economy.
What Investors Should Do
Translating deglobalisation into portfolio decisions requires moving beyond the surface narrative. A few practical principles:
Follow the capital, not just the theme: Industrial policy subsidies create genuine financial incentives that alter investment economics. Businesses that are receiving $500 million in government grants to build a factory have a very different investment case from businesses competing against them in the open market.
Focus on durable structural changes rather than cycle: Some of the reshoring momentum is structural (semiconductor sovereignty, pharmaceutical resilience) and will persist regardless of political cycles. Other elements (tariff rates, specific subsidy programmes) can be reversed. Distinguishing durable from cyclical is essential.
Consider the real estate angle: Industrial and logistics real estate in reshoring hubs has fundamental demand support that is relatively easy to underwrite — factories and distribution centres need physical space, and planning/permitting takes years, creating supply constraints.
Assess currency effects: Deglobalisation affects currency dynamics. The US dollar's role as the world's trade currency is slowly eroding at the margins; currencies of reshoring winner countries may benefit from investment inflows.
All investments carry risk, including loss of capital. Geopolitical and industrial policy dynamics are inherently unpredictable. Investors should seek professional advice before making thematic allocations.
How Global Investments Can Help
Global Investments helps internationally mobile HNW investors navigate structural investment themes — including the deglobalisation transition — across global equity, real assets, and private markets. Our advisers understand the cross-border, multi-currency considerations that shape portfolio construction for clients with wealth distributed across multiple jurisdictions.
Contact us through globalinvestments.net for a confidential conversation about positioning your portfolio for the reshaping of the global economy.
This article is for general information only and does not constitute financial, legal or tax advice. Rules, prices and regulations change; verify current requirements with a qualified adviser before acting.