After the end of the Cold War, what really accelerated was the economic integration of big nations.

As I sign the North American Free Trade Agreement into law, we are ready to compete.

What made sense for businesses from a profit motive standpoint, from a cost and efficiency standpoint, was generally also supported by governments when it came to developing really complicated supply chains around the world.

The more countries work together, the more their economies are linked, the more likely they are to be at peace with each other and that that therefore is good for the world.

We're clearly not on that path anymore.

There's a lot of uncertainty about what is ahead.

So right now, the world economy is said to be at something of an inflection point.

It's a rethinking of globalization and to some extent of regionalization, and it changes everything.

We are in the midst of a serious financial crisis.

So in the years after the financial crisis, the conventional Western economic capitalist led model came under a lot of scrutiny, given the impact that that crisis had on ordinary people.

And in 2016, we saw a vote for Brexit, an exit from the European Union in the U.K. and the election of Donald Trump in the U.S.

That in extension triggered a big trade war between China and the U.S.

We've seen a global pandemic that has tested those global supply chains, and that has led a lot of countries to rethink offshoring production.

We're seeing war in the Middle East.

We are seeing coups in Africa.

And those conflicts are leading people to question even more the benefits of globalization.

It was unprovoked, but this is what Russian President Vladimir Putin unleashed on Ukraine.

Explosions rocking several cities, including the capital of Kyiv.

Russia's invasion of Ukraine was a sort of crystallizing moment for people on both sides of this emerging divide in the global economy.

In 2022 at the United Nations, we had a series of votes over condemning Russia's invasion of Ukraine.

This is illegal invasion.

It is illegal occupation.

It is illegal annexation, all at gunpoint.

Roughly two-thirds of the global economy, led by the United States, voted to condemn Russia.

The remaining third, we saw countries either abstain or vote to reject any condemnation.

We're seeing billions of dollars in investment in new factories that is now being guided by geopolitics rather than simply economics.

And that is really seen when you dig down into the United Nations vote.

In 2022, we saw $1.2 trillion in foreign direct investment in the world.

We also saw $180 billion of that shift from the bloc that refused to condemn Russia's invasion of Ukraine to the U.S.-led bloc condemning Russia's invasion.

The International Monetary Fund found that if you had a full fracturing of the global economy, you would eliminate 7% of global GDP.

That doesn't sound like much, but it is equivalent to wiping out the French and German economies together.

China remains, of course, the world's factory floor.

It offers scale that no one else does.

Sentiment towards investing there has turned quite negative in recent years.

But there's a whole network of global trade that is resting on the interrelationships that have developed between the U.S. and China over the last 20 or 30 years.

Many people refer to it as, you know, I'm making the omelette.

If you're an American company, you're still going to be very reliant on many things made in China for many years to come.

There is a group of economies who are navigating the middle of this geopolitical divide.

You can call them the connector economies.

They're not in the game of choosing sides.

They're attracting factories from the U.S., factories from China, often located close by or in the same industrial park.

They're importing from China, they're selling to the West or vice versa.

They can take advantage of their neutrality to get benefits from both sides in this emerging rivalry.

In northern Vietnam, you can drive an hour from the Chinese border and into what was once a farm field with water buffaloes and banana trees.

You're seeing big factories go up.

Over the last five years, we've seen exports from Vietnam to the United States double.

But at the same time, we've seen imports from China into Vietnam double as well.

Countries like Poland are now getting huge investment from China and South Korea and even U.S. chip makers as they set themselves up as a link between Europe and the rest of the world.

We're also seeing places like Indonesia, which has vast natural resources, bring together

Ford, the U.S. automaker, and Chinese companies and Brazilian miners to exploit nickel mines to sell into China or to sell into the United States.

If you're a country like Morocco that has a free trade agreement with America and you already have also quite good relations with China, well then obviously you're in a position to play both sides.

Mexico is perfectly placed to cash in on this so-called fragmentation.

Sitting right on the U.S. border, it's a textbook example of nearshoring.

But Mexico is also attracting a lot of Chinese investment, and that's why it's able to straddle both sides of this divide.

Plenty of people talking about what's the sales made in China can sell in the future made in Mexico.

And right now we've got the potential, if we get our act together, to get all those consumer goods, electronic consumer goods that went into China to be manufactured in

Mexico.

To be clear, these connector economies in some cases have a long way to go before they have the necessary infrastructure in place.

Motorways, ports, electricity networks, these are all key features that global manufacturers want and need.

China, of course, has excelled at that for decades.

These other economies are now trying to catch up.

We're at the very beginning of this story.

The reality is we're not seeing the end of globalization, but we are seeing a reshaping of the global economy.

It's an incredibly interlinked global economy that we live in.

Business will continue to be done, money will continue to flow around the world, and even though there will be tensions at a government-to-government level, companies will look for a way around those political divides.

But how this happens and the direction we go in the years to come is really going to shape all of our lives.