Earlier this month, London Chamber of Commerce and Industry hosted a thought-provoking panel event which explored whether we have reached "peak deglobalisation", and examined how the outcome of the US election might shape the future of global trade, investment trends, and international cooperation. 

Globalisation = the process of increasing interconnectedness between countries through trade, technology, and cultural exchange. 

Deglobalisation = The retreat from global interconnectedness, often marked by rising protectionism and reduced cross-border collaboration. 

Hosting this pivotal discussion in London underscored the city’s role as a global hub for trade and investment. While deglobalisation reflects a retreat from interconnectedness, London stands as a powerful counterpoint—a city that embodies the advantages and benefits of globalisation, connecting businesses, talent, and innovation across borders to drive shared prosperity on a global stage. 

The discussion covered the influence of recent geopolitical shifts, particularly the return of Donald Trump, and how these dynamics impact London and the UK, China, and the broader global economy.

We were fortunate to have an incredible line-up to guide the conversation including James Landale, Diplomatic Correspondent at the BBC, Peter Foster, Public Policy Editor at the Financial Times and Olivia O’Sullivan, Director, UK in The World Programme, Chatham House.

Richard Moir, LCCI Board Member and International Strategic Advisor, hosted the event and opened the discussion by highlighting the pivotal role Chambers of Commerce play in navigating global trade. 

The US Election 

The conversation quickly turned to the implications of Donald Trump’s return to power, with panellists debating whether this marks a return to isolationism or a continuation of tough but strategic global engagement.

Olivia O’Sullivan saw the Trump presidency as a clear shift from Biden's transatlantic diplomacy to renewed protectionism. However, Peter Foster observed that Trump's and Biden's trade policies are not as far apart as either might make out, particularly regarding China, and noted that the Biden administration didn’t overturn many of Trump’s protectionist measures. 

Peter warned that in his second term, Trump could choose to surround himself with “competent and loyal” advisers, a shift from his previous administration where he started with “loyal but incompetent” advisors before moving on to “competent but disloyal” people. This change could result in the introduction of policies which are more effective, and potentially more destructive than anticipated.

Implications for the UK

The discussion then shifted to how these developments might affect the UK and London’s position on the global stage, particularly under a new Labour government led by Keir Starmer, which has had a notably fractious engagement with Trump.

Our panellists’ insights were particularly timely given a recent report by Oxford Economics which found that 40% businesses identified a potential Trump presidency as a top global economic risk and expectations of a renewed trade war rose to 20% in the latest survey.

Our panellists expressed scepticism that Trump would prioritise a trade deal with the UK, and that the incoming President would be more likely to focus on ‘American First’ policies, with trade negotiations becoming more transactional. They also warned that a "Trumpian tariff war” could be “incredibly toxic” and cautioned that the UK will likely face "tricky choices" as it tries to balance its relationships with the US and the EU, as well as manage its own trade and regulatory policies. 

In navigating these challenges, London’s unique standing as a global business hub provides the UK with a vital advantage. Its deep-rooted connections to international markets make it an essential player in shaping and sustaining global trade flows amid shifting geopolitical current.

Opportunities for the UK

A central theme of the discussion was how middle-power nations like the UK should approach its diplomatic and economic relationships with the US and China. Our panellists presented several areas of opportunity for the UK to capitalise on:

Leveraging relationships with "Middle Powers":

• The panel highlighted that countries like Japan, South Korea, and Australia—key "middle powers" in global geopolitics—could serve as valuable examples for the UK. These nations have successfully balanced relationships with both the US and China without being forced into full alignment with either.

Promoting Economic Cooperation and Understanding:

• Richard Moir underscored the vital role the London Chamber of Commerce plays as a "merchant of peace," leveraging its networks and influence to encourage dialogue, foster diplomacy, and resolve conflicts through trade and economic collaboration.
• By promoting mutual understanding and emphasising shared economic interests, Chambers can serve as a bridge between diverse stakeholders, reinforcing the stabilising power of global commerce in an increasingly polarised world. As Richard noted, “countries that trade together tend to stay together”.

The role of businesses

Businesses in the UK play a key role in upholding globalisation through international trade and investment. In 2023, the UK saw a trade surplus of £72.1 billion with its largest trading partner, the United States, emphasising the importance of bilateral trade relationships. 

In order to maintain and strengthen this ‘special relationship’, our panellists emphasised the need for businesses to adopt a nimble approach in how they structure their operations and supply chains. Emphasising the importance of diversifying supply chains and exploring alternative manufacturing hubs, they underscored these strategies as key means for businesses to mitigate the risks posed by growing trading tensions. 

In addressing global challenges, the panel concluded with a call for pragmatic leadership, strategic policymaking, and multilateral cooperation to navigate and address the complexities of deglobalisation in the years ahead.