Trade hyperglobalization is dead. Long live…?

This paper examines the evolving landscape of global trade since the global financial crisis. It argues that a new era—characterized by the deglobalization of goods and the slower yet persistent globalization of services—has supplanted the era of hyperglobalization. It posits that the halt in manufacturing’s shrinking share in global value added may have mitigated even stronger deglobalization caused by a number of influences such as slowing income convergence, financial deglobalization, and more restrictive trade policies. The paper also documents the end of disruptive North-South trade and highlights a new China puzzle, in which sharp internal trade contraction coexists with surging global export shares. It also reveals a positive correlation between mercantilism and both trade and growth at the global level.