Are we approaching the moment where globalization suddenly comes to a very firm halt? The whole premise for “making the world flat” was to get Johnny Asian to manufacture things darn cheap for fat Westerners.
China entered the World Trade Organisation in 2001 and its exports have soared ever since. Factories in the US have been relocated to China, an incredible amount of gigantic container ships are being built to ferry all these finished products back to the shelves of Wal-Mart et al.
Massive inflation in China in the past 12 months has given some factory owners pause for thought. But the real reason why globalization is unsustainable is down to the price of oil. At $135 a barrel suddenly moving that tshirt/teddy bear/TV 6,000 miles from Shenzhen across the Pacific to the US consumer just does not make economic sense. International trade is likely to become far more regional if oil prices remain at such exorbitant levels. Thomas Friedman will have to eat his hat.