By David Born

The world order is undergoing profound shifts. Since returning to the White House as the 47th President of the United States, Donald Trump has shaken the foundations of global trade — imposing sweeping unilateral tariffs on nearly every country on what has since been dubbed “Liberation Day” — and placing geopolitics firmly back at the centre of global attention. Yet the current rupture is not a sudden shock, but the culmination of longer-running shifts. Years of growing strategic rivalry between China and the West, the retreat of multilateralism, and the return of industrial policy had already begun to challenge the liberal order. The supply chain disruptions of the Covid-19 pandemic and the energy crisis following Russia’s invasion of Ukraine merely accelerated a transformation that was already underway — one in which geopolitics once again defines the boundaries of globalization.

Shifts in the global balance of power, however, are nothing new. The tides of geopolitics — and with them, the state of globalization — have ebbed and flowed for centuries. Wars, financial crises, and political resets have punctuated these cycles. Yet, over the past 80 years, one long-term trend seemed unbroken: globalization’s steady rise. Today, that trajectory appears less certain. Mounting protectionism - not only since Trumps return - raises doubts about whether the world can sustain the open, integrated order of the late 20th century. The latest Roland Berger Quarterly explores how the future of globalization might unfold amid escalating geopolitical and geo-economic tensions.

Globalization’s success sowed the seeds of its backlash

To understand the recent backlash against globalization - particularly across Western economies - one must first revisit its recent past. In the three decades following the end of the Cold War, the United States assumed the role of architect and guarantor of a liberal, rules-based order — promoting open markets, enforcing trade rules through institutions such as the WTO, and anchoring global finance via the Bretton Woods institutions. This US-led framework expanded international trade and lifted hundreds of millions out of poverty. Nowhere was this more visible than in Asia, where countries embedded themselves in Western value chains through targeted industrial policies.

Western companies, in turn, shifted production from Europe and the US to the Global South - especially China - in search of cost advantages. The result was a mutually reinforcing cycle: corporations reduced costs and gained access to fast-growing markets, while emerging economies industrialized and accumulated wealth — creating a new class of consumers that, in turn, further boosted demand for Western goods. Over time, however, this transformation shifted the global economic centre of gravity southward. Today, the Global South - including China - accounts for more than half of global economic output. Meanwhile, the Western share has shrunk from roughly 60% in 1990 to just 40% in 2023.

Globalization’s winners and losers were unevenly distributed. As high-paying industrial jobs moved offshore, many regions across the Western world - from the US Rust Belt to parts of Europe - struggled to adapt to a service-led economy. As middle classes across emerging markets expanded and incomes rose rapidly, lower-middle-income groups in the West lost ground in relative terms — slipping down the global income ladder as their earnings grew more slowly than those of their peers in the Global South. The resulting discontent, rooted in economic dislocation and social frustration, drove disruptive election results such as Brexit and Donald Trump’s re-election in 2024 - this time with an even more populist, anti-globalist agenda compared to his first term.

A new center of gravity emerges in the global south

Emerging economies, on the other hand, over the past decades have carefully balanced economic and security ties between Washington, as guarantor of the old order, and Beijing, as architect of a new one. This “dual engagement” has been most visible in Asia, where governments embraced China as a trading partner while maintaining security partnerships with the US.

Since returning to office, however, Donald Trump has sought to accelerate America’s retreat from the liberal order it once built. Washington’s new tariff regime places heavier burdens on emerging economies than on developed allies such as Japan or the EU. At the same time, Trump’s renewed questioning of America’s security guarantees — including its commitment to NATO — has heightened uncertainty over the reliability of US leadership in both economic and geopolitical affairs. This makes emerging economies’ balancing act as described above difficult to maintain.

China, by contrast, has spent years methodically building alternative institutions. Through the expansion of BRICS — now encompassing a growing roster of middle powers — and regional security groupings such as the Shanghai Cooperation Organisation, Beijing is constructing parallel pillars of global governance. Its Belt and Road Initiative, the creation of the Asian Infrastructure Investment Bank and New Development Bank, and the development of alternative financial and payments systems such as CIPS and mBridge, all serve one purpose: to position China as the nucleus of a new, post-Western order.

The future of globalization

Given both the scale and speed of these changes it is far from certain that globalization, as the world has known it over the past 80 years, will continue to advance. This, however, does not spell globalization’s end. Rather, it is entering a new phase — one defined by fragmentation, regionalization, and competing spheres of influence.

In times of transformation, linear extrapolation of the past offers little guidance. What is needed instead is strategic foresight. In this issue of the Roland Berger Quarterly, we develop a scenario-based framework along the dimensions of geopolitics and geo-economics to map plausible futures. These scenarios help leaders identify signposts, assess risks, and craft agile strategic responses.

Although the scenarios do not predict a single outcome, they provide essential orientation for decision-makers navigating a rapidly changing world.

For business, these shifts are anything but abstract: choices about production footprints, investment destinations, and trade partners can no longer be divorced from geopolitics. Agility and resilience are emerging as the new benchmarks of competitiveness. The companies that will succeed in this shifting order are those, that treat agility and resilience not as optional enhancements, but as strategic imperatives — operating in the world as it is, rather than the world as it once was.