De-globalisation
Where US trade is regrouping — the neighbourhood, the allies, the suppliers — what it charges at the border, and how much of the critical goods still come from China
Thesis
Is world trade actually fragmenting?
- Trade shifts toward allies and the neighbourhood, away from China.
- Effective tariffs reach levels unseen since the 1940s.
- Dependence on China for critical goods recedes slowly.
Index
Five indicators, standardized and equal-weighted, updated monthly — 100 = January 2012, higher means more de-globalisation
De-globalisation Index
128.6
1 mo
↑ +2.2
1 yr
↑ +14.2
Source: Liquiqui, from US Census Bureau
Where each constituent stands today, in standard deviations from its own average since 2012
- USMCA share of US tradeMonthly · Aug 1, 2026+0.2
- Allies / rivals ratioMonthly · Aug 1, 2026+2.5
- Regional − total growthMonthly · Aug 1, 2026+0.4
- Effective tariff rateMonthly · Aug 1, 2026+2.0
- China critical share (inv.)Monthly · Aug 1, 2026-0.3
Notes
- What is happening
- The index stands at 128.6 in August 2026, a record, against a base of 100 in December 2011, after 126.4 in July and 128.0 in June. It ranged between 104 and 112 from 2013 to 2019, the 2018 trade war included, then hit its all-time low of 93 in January 2025 — trade with China had rebuilt, tariffs were stable. Everything turned in six months: 116 in June 2025, 118 in January 2026. Today the allies-to-rivals ratio and the tariff rate are the most stretched constituents (+2.5 and +2.0 standard deviations), and only China's share of critical goods pulls the other way (−0.3 inverted): it remains above its average.
- Why it matters
- De-globalisation does not show in the volume of trade, which stays near its records, but in its shape: with whom, at what price, and with what dependence. This index combines five measures at equal weight — the neighbourhood's share, the allies-to-rivals ratio, the growth gap between the neighbourhood and the rest, the effective tariff rate, and China's share of critical goods, inverted — each standardised against its own history, to answer one question: is US trade closing faster or slower than usual?
- What's driving it
- The 2025 tariffs, which halved Chinese imports in eighteen months and lifted the allies-to-rivals ratio above 9.
- What to watch
- The index measures a policy more than a trend: its two dominant constituents are the ones the 2025 tariffs moved at a stroke. The test of the coming quarters is the neighbourhood's share and the regional growth gap — if trade leaves China without arriving in Canada and Mexico, it is going to Southeast Asia, and de-globalisation is only a detour. An index holding above 120 with a stabilised allies-to-rivals ratio would say the new regime is settling in. The 10 November 2026 expiry of the Busan truce is the next test of the two dominant constituents.
Signals
Each indicator scored by how far it has moved — and the arrow points the way the pressure is heading
| Criterion | Current Reading | Trend | Comment |
|---|---|---|---|
Intra-regional tradein the index How much of US trade is with Canada and Mexico? | Low/Moderate | ↑ | 29.7% in August 2026, against 28.5% at the end of 2019 and 29.0% in 2010. The share is remarkably stable over fifteen years: US de-globalisation is not a retreat into the neighbourhood, but an exit from China. |
Friend-shoringin the index Is trade shifting towards allies and away from rivals? | High | → | Trade with the allies is worth 9.4 times trade with China and Russia in August 2026, against 4.1 in 2010, 4.6 at the end of 2019 and 5.4 at the end of 2024. The ratio has nearly doubled in twenty months: the most violent figure on the page, entirely down to the collapse of Chinese imports under the 2025 tariffs. |
Regional against global growthin the index Is trade with the neighbourhood growing faster than the rest? | Moderate | → | US trade with USMCA grew 1.0 point faster than total US trade over the twelve months to August 2026, after −2.6 points at the end of 2024. On the WTO's numbers for the second quarter of 2026, North America's trade volume grew 2.1 points more than the world's after 5.5 points less in the first, Europe's 3.1 points less, Asia's 6.6 points more: world trade is shifting to Asia. |
Effective tariffsin the index What is actually paid at the border, and by whom? | High | ↓ | 6.9% of imports in August 2026, the first rise since the Supreme Court struck down the IEEPA tariffs in February 2026 (6.5% in July), down from a 10.8% peak in October 2025 but against 2.3% at the end of 2024 and 1.4% in 2010. On China, 22.8% against 40% in August 2025 and 11.5% at the end of 2019; on the allies, 4.9% against 0.7% at the end of 2024 — the 2025 tariffs hit friends almost as hard as rivals, which sets this episode apart from the 2018 trade war. |
Critical goodsin the index How much of the sensitive goods still comes from China? | Moderate | → | Over the twelve months to August 2026, China supplies 61.0% of imported rare-earth compounds (68% at the end of 2024), 34.8% of batteries (56%), 3.5% of pharmaceuticals and 2.2% of integrated circuits. The four together: 6.3%, against 9.7% at the end of 2024. The decoupling is real in batteries, marginal in rare earths, and chips never depended on China. |
Raw data
Intra-Regional Trade Share
USMCA share of US goods trade
29.7%
1 mo
↓ -0.0%
1 yr
↑ +0.1%
Source: US Census Bureau
Notes
- What is happening
- 29.7% in August 2026, against 28.5% at the end of 2019, 28.0% at the end of 2024 and 29.0% in January 2010. The share has not left a 27 to 31% band in sixteen years: Mexico gained what China lost, but the rest of Asia took as much. Mexico became the largest US supplier in 2023 without the North American bloc weighing more.
- Why it matters
- The intra-regional trade share is the classic measure of regionalisation: if value chains shorten, trade with neighbours should gain on distant trade. For the United States the region is USMCA — Canada and Mexico — and the measure covers goods, imports and exports together.
- What's driving it
- Mexico gains what China loses in autos and electronics, but Vietnam and the rest of Asia take as much: the neighbourhood share stays flat.
- What to watch
- The threshold that would matter is 33%: the level a genuine repatriation of automotive and electronics chains to Mexico would imply. Below 27%, American regionalisation would be a statistical myth. At the joint review of 1 July 2026 the United States declined to extend USMCA, which puts the agreement under annual review; the USTR is aiming for interim arrangements with Mexico and Canada by the end of 2026, while 50% duties on 27.6 billion dollars of Canadian goods (22 August) and Canada's counter-tariffs (8 September) are in force.
Friend-Shoring: Allies Against Rivals
Allies / rivals trade ratio
9.40
1 mo
↑ +0.38
1 yr
↑ +1.11
Source: US Census Bureau
Notes
- What is happening
- 9.4 in August 2026, against 4.1 in 2010, 4.6 at the end of 2019 and 5.4 at the end of 2024. The ratio took fourteen years to go from 4 to 5.4, then nearly doubled in twenty months. The cause is single: Chinese imports halved under the 2025 tariffs while trade with the allies held roughly steady. This is not a move towards the allies, it is a move away from China.
- Why it matters
- Friend-shoring is the geopolitical version of regionalisation: trading with those whose alliances one shares. The ratio divides US goods trade with the allies — USMCA, the European Union, the United Kingdom, Japan, South Korea, Australia, Taiwan — by trade with the two designated rivals, China and Russia. Russia has counted for almost nothing since 2022; in practice the ratio is a ratio on China.
- What's driving it
- Chinese imports halved under the 2025 tariffs while trade with the allies held steady: a move away from China, not towards the allies.
- What to watch
- A ratio settling above 8 with Chinese imports that do not rebound would mean the decoupling is structural — relocated to Vietnam, Mexico, India — rather than an inventory effect. A return below 6 would say the tariffs were circumvented or lifted. The expiry of the Busan truce on 10 November 2026 will say whether the tariffs on China hold.
Regional Trade Growth Minus Global
USMCA minus total US trade growth
1.0%
1 mo
↑ +0.2%
1 yr
↑ +7.0%
Source: US Census Bureau
WTO: regional trade volume growth minus world, year on year
Source: WTO
Notes
- What is happening
- On the Census side, +1.0 point over the twelve months to August 2026: the neighbourhood grows slightly faster than the rest, after −2.6 points at the end of 2024 and +2.9 at the end of 2022. On the WTO side, in the second quarter of 2026, North America grew 2.1 points more than the world, after 5.5 points less in the first — the round trip of imports front-loaded ahead of the tariffs and then refunded; Europe remains 3.1 points below the world and Asia 6.6 points above. World trade has not slowed: it has shifted to Asia and between Asian countries.
- Why it matters
- Comparing regional trade growth with total trade growth says whether regionalisation is advancing or retreating, independently of the cycle. Two readings: on the Census side, growth of US trade with USMCA minus growth of all US trade, on trailing twelve months; on the WTO side, each major region's trade volume growth minus the world's, quarterly — the page's only global measure.
- What's driving it
- Supply chains relocating to Southeast Asia and Mexico, with Asia's intra-regional trade growing fastest of all.
- What to watch
- A Census gap sustained above +3 points would be the signature of real relocation to Mexico. The WTO gap for North America is the figure to follow for the world: at −5 points, as in the first quarter, the United States is opting out of world trade more than regionalising it; the second quarter's +2 says whether that was a blip.
Effective Tariff Rate by Partner
All partners
6.9%
1 mo
↑ +0.4%
1 yr
↓ -3.6%
China
22.8%
1 mo
↑ +1.4%
1 yr
↓ -17.0%
Allies
4.9%
1 mo
↑ +0.2%
1 yr
↓ -1.9%
Source: US Census Bureau
Notes
- What is happening
- 6.9% of all imports in August 2026, against 2.3% at the end of 2024, 2.9% at the end of 2019 and 1.4% in 2010 — the highest level since the 1940s, outside the 10.8% peak of October 2025. The rate had been falling since the Supreme Court struck down the IEEPA tariffs on 20 February 2026 — 8.5% in February, 6.9% in March, 6.5% in July — and August is the first rise, the first full month of the Section 301 duties that took effect on 24 July. On China: 22.8%, against 40% in August 2025, 11.5% at the end of 2019 and 3.4% in 2010. On the allies: 4.9%, against 0.7% at the end of 2024. The 2018 trade war targeted China; the 2025 one taxed the allies almost as fast, and the rate on China doubled a second time.
- Why it matters
- The effective tariff rate — duties calculated by customs over imports for consumption — is de-globalisation measured in dollars: what protectionism actually costs at the border, once exemptions and workarounds are counted. The breakdown by partner says whether the barrier targets rivals or everyone.
- What's driving it
- The 2025 tariff rounds, rebuilt on other statutes since the Supreme Court's ruling of February 2026: a 10% Section 122 surcharge from 24 February to 24 July, replaced the same day by a 10-12.5% Section 301 tariff on some sixty countries, China included, plus the Section 232 duties on metals and autos — with exemptions that importers use to shift purchases.
- What to watch
- The effective rate always runs below the announced rates, because importers shift purchases to the least-taxed products and countries. The gap between the posted rate on China and the effective 23% measures that workaround. A total rate sustained above 8% would return the United States to its pre-1945 regime.
Critical Goods Dependency on China
Four goods together
6.3%
1 mo
↓ -0.2%
1 yr
↓ -2.2%
Source: US Census Bureau
Notes
- What is happening
- Over the twelve months to August 2026: rare earths 61.0% (68% at the end of 2024, 55% at the end of 2019), batteries 34.8% (56% at the end of 2024, 29% at the end of 2019), pharmaceuticals 3.5%, integrated circuits 2.2%. The four together: 6.3%, against 9.7% at the end of 2024 — a share dominated by pharmaceuticals, which come from Ireland and India, and by chips, which come from Taiwan, Malaysia and Korea. The decoupling is real in batteries, marginal in rare earths.
- Why it matters
- Dependence on critical goods is where de-globalisation stops being a choice: a country can diversify its toys, not its rare earths overnight. Four goods are tracked at the Harmonized System level that isolates them — pharmaceuticals (chapter 30), integrated circuits (8542), batteries (8507), rare-earth compounds (2846) — by China's share of US imports over trailing twelve months.
- What's driving it
- Battery cells shifting to Korea, Japan and US plants; rare-earth separation still almost entirely Chinese.
- What to watch
- Rare earths are the one dependence where China also holds the world's refining: a share back below 50% would mean the Australian and American separation plants are finally producing. For batteries, the question is whether 35% is a floor — Korean and Japanese cells assembled in the United States still rely on Chinese materials this measure cannot see. China's suspension of its rare-earth export controls, negotiated at Busan, expires on 10 November 2026.
Methodology
1Sources
Census Bureau international trade API (imports and exports by partner and HS code, calculated duties); WTO regional volume indices for context, outside the index.
2Normalisation
Shares and ratios of goods trade on trailing twelve months, tariffs as duties / imports, the regional growth gap in percentage points; monthly.
3Z-scores
Each constituent minus its mean since 2012, divided by its standard deviation; capped at ±3. China's share of critical goods enters inverted.
4Weighting
Five constituents, equal weights.
5Index
Average of the five z-scores × 20 points, rebased to 100 in December 2011. Updated monthly, about six weeks after the month.
6Interpretation
Higher means more de-globalisation. The tariff and allies-to-rivals constituents move with policy; the neighbourhood share says whether trade really relocates.