WEBVTT 1 00:00:01.710 --> 00:00:04.350 Global trade has been going through a volatile 2 00:00:04.350 --> 00:00:07.590 and tectonic shift over the last decade or so, 3 00:00:07.590 --> 00:00:09.360 but global trade has also become 4 00:00:09.360 --> 00:00:12.090 deeply intertwined with geopolitics lately. 5 00:00:12.090 --> 00:00:13.440 We built a trade model 6 00:00:13.440 --> 00:00:15.720 using half a billion data points 7 00:00:15.720 --> 00:00:18.510 by product, by countries, to really see 8 00:00:18.510 --> 00:00:20.130 how the trade flows are changing. 9 00:00:20.130 --> 00:00:23.100 We've also forecasted it for the next ten years. 10 00:00:23.100 --> 00:00:25.350 There are a few themes that emerge. 11 00:00:25.350 --> 00:00:27.480 Now, underlining all of that theme 12 00:00:27.480 --> 00:00:29.040 is one of the key changes 13 00:00:29.040 --> 00:00:31.770 that's happening in trade between US and China. 14 00:00:31.770 --> 00:00:33.990 Trade between US and China has been shrinking 15 00:00:33.990 --> 00:00:35.310 for the last few years, 16 00:00:35.310 --> 00:00:38.460 and will continue to shrink over the next decade. 17 00:00:38.460 --> 00:00:41.280 Now, that will get substituted with new trade routes, 18 00:00:41.280 --> 00:00:43.680 and here is where the opportunities come. 19 00:00:43.680 --> 00:00:45.900 We see four major themes. 20 00:00:45.900 --> 00:00:48.780 The first theme is around the resilience 21 00:00:48.780 --> 00:00:50.640 of the North American bloc. 22 00:00:50.640 --> 00:00:52.680 US, along with their allies, 23 00:00:52.680 --> 00:00:55.320 is creating a new set of trade routes, 24 00:00:55.320 --> 00:00:57.750 and what we see is trade of US to the world 25 00:00:57.750 --> 00:00:59.130 is still growing. 26 00:00:59.130 --> 00:01:01.410 That means US is resilient. 27 00:01:01.410 --> 00:01:04.050 Only the trade lanes are substituting from China 28 00:01:04.050 --> 00:01:08.010 away to Mexico, to ASEAN, to India, and so on. 29 00:01:08.010 --> 00:01:11.280 So the first theme is around North American resilience. 30 00:01:11.280 --> 00:01:13.860 The second theme is around China's own pivot. 31 00:01:13.860 --> 00:01:16.740 China very much still remains the factory of the world. 32 00:01:16.740 --> 00:01:20.910 Over 35% of global production is in China, 33 00:01:20.910 --> 00:01:23.640 and therefore, China needs a market for those products. 34 00:01:23.640 --> 00:01:25.290 Therefore, they are pivoting to nations 35 00:01:25.290 --> 00:01:26.670 of the Global South. 36 00:01:26.670 --> 00:01:28.950 We forecast that China trade 37 00:01:28.950 --> 00:01:32.220 with the Global South will grow nearly 6% per year. 38 00:01:32.220 --> 00:01:34.800 The third theme is around the Global South itself 39 00:01:34.800 --> 00:01:36.870 to be a member of global manufacturing 40 00:01:36.870 --> 00:01:38.070 and global supply chains. 41 00:01:38.070 --> 00:01:39.600 For this, they need to trade with each other 42 00:01:39.600 --> 00:01:41.430 and trade with the Global North. 43 00:01:41.430 --> 00:01:43.380 Trade between South to South 44 00:01:43.380 --> 00:01:44.580 in the Global South countries 45 00:01:44.580 --> 00:01:46.830 is going to grow nearly 4%. 46 00:01:46.830 --> 00:01:48.000 This offers opportunities 47 00:01:48.000 --> 00:01:49.890 for emerging markets around the world. 48 00:01:49.890 --> 00:01:52.260 The final theme is around the EU. 49 00:01:52.260 --> 00:01:55.200 EU is going through its own substitution; 50 00:01:55.200 --> 00:01:57.060 was trading a lot with Russia in the past, 51 00:01:57.060 --> 00:01:58.590 which cannot happen now, 52 00:01:58.590 --> 00:02:01.530 so therefore, EU's trading much more with the US. 53 00:02:01.530 --> 00:02:03.180 But we are also seeing themes 54 00:02:03.180 --> 00:02:05.490 around EU pivoting towards Africa, 55 00:02:05.490 --> 00:02:07.740 towards Middle East and other emerging markets 56 00:02:07.740 --> 00:02:10.020 to create new trade relationships. 57 00:02:10.020 --> 00:02:12.990 What does this mean for businesses and governments? 58 00:02:12.990 --> 00:02:15.330 Those of you who are shifting your supply chains, 59 00:02:15.330 --> 00:02:17.490 think about where you should shift it to, 60 00:02:17.490 --> 00:02:19.380 and how to make them more robust, 61 00:02:19.380 --> 00:02:21.690 more cost effective, and more resilient. 62 00:02:21.690 --> 00:02:23.220 For those of you who are not thinking 63 00:02:23.220 --> 00:02:24.720 of shifting your supply chains, 64 00:02:24.720 --> 00:02:27.300 think about how much it might cost you in the future 65 00:02:27.300 --> 00:02:29.070 as these trade lanes evolve 66 00:02:29.070 --> 00:02:31.050 and as geopolitics unfolds. 67 00:02:31.050 --> 00:02:33.720 Regardless of where you are, global trade matters. 68 00:02:33.720 --> 00:02:35.271 Watch it carefully. 69 00:02:35.271 --> 00:02:37.486 (gentle upbeat music)