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AS GLOBAL stock markets fluctuate in response to the latest round of U.S. tariffs, many see the phenomenon as merely a temporary reaction to economic uncertainty.
But a closer look reveals that this turbulence is actually part of a larger symptom: the end of the era of globalization as we have known it for the past three decades. What is happening today is not just a tug-of-war between major countries, but a fundamental shift in the way the world interacts economically and politically.
America’s policy of high tariffs is not an isolated move. It is the culmination of accumulated dissatisfaction and uncertainty about the global structure that has been perceived as providing unequal benefits.
When America decides to impose high tariffs on imported goods, what it is actually doing is deconstructing the global rules of the game that it had previously pushed for. This is a real form of retreat from the global consensus and a strengthening of the logic of economic sovereignty.
In a five-minute video uploaded to his social media account on April 4, 2025, Singapore’s Prime Minister Lawrence Wong even described Trump’s tariff policy as a “major shift in the global order.” PM Wong also claimed that the era of globalization and rules-based free trade was over.
The impact was indeed felt widely and quickly. Although the Indonesian stock market was still closed for a holiday when the policy was announced, the general decline in the stock markets of Korea, Japan, Singapore, Europe and other regions still attracted attention and sparked widespread discussion among investors.
At the same time, multinational companies came under tremendous pressure as global supply chains were disrupted. Production costs soared, inflation crept up, and consumer purchasing power declined. This is not just about economics; it is also about ideology.
Exclusive Alliances
Suddenly, the world began to turn away from the idea of a single, interconnected global market to a more fragmented, closed, and focused system of exclusive alliance groups.
If in the past the world talked about free trade as the norm, what is happening now is the rise of protectionism with a new face, including tariffs, technology embargoes, restrictions on cross-border investment, and friend-shoring strategies.
Countries are beginning to formulate economic strategies on the assumption that global stability can no longer be guaranteed.
This can be seen in the European Union’s policy of “strategic independence” or China’s “dual circulation,” which emphasizes domestic production and consumption as the anchor of national stability. These are all responses to the new reality that globalization is no longer seen as a guarantee of growth, but rather as a source of vulnerability.
Daria Taglioni, a research manager at the World Bank, highlighted in 2023 the major changes in the global trading system that are closely linked to changes in patterns of industrial organization.
She noted that the trend toward regionalization, reshoring, and other forms of deglobalization threaten two key foundations of the modern economy: economic complexity and interdependence among countries. These two aspects have contributed greatly to economic growth, poverty reduction and technological innovation.
However, preserving these benefits amidst an increasingly fragmented global economic governance is the most difficult trade policy challenge in decades.
Trade tensions, which are now spilling over into the geopolitical realm, are exacerbating this shift. With the European Union and China openly declaring that they will retaliate against U.S. tariffs, the world is no longer talking in terms of cooperation, but in terms of fierce competition.
The world is once again being drawn into the dynamics of economic blocs, where strategic alliances are key. Investment flows are also beginning to follow the same logic, from global flows to regional flows, from open markets to markets considered “safe” within a mutually agreed political framework.
In this context, the trend toward deglobalization is no longer a speculative discourse, but a structural reality. The global supply chain, once efficient, is now seen as a source of risk.
Countries are starting to build production systems that are geographically and politically closer to avoid dependence on countries that are seen as potential “enemies” in the future. This creates opportunities for countries that are considered neutral, have natural resources and are not too involved in geopolitical battles.
Indonesia’s Opportunities
In The Specter of Deglobalization, T.V. Paul, professor of international relations at McGill University and founding director of the Global Research Network on Peaceful Change, discusses the growing concern that the era of globalization is being replaced by a wave of nationalism, protectionism, territorial expansion, and a new form of Cold War characterized by the struggle for influence between great powers.
Although the forces of deglobalization are increasingly prominent, Paul emphasizes that the flow of globalization has not completely disappeared; it is still taking place in parallel, albeit more hampered and uneven than before.
The article highlights the complex dynamics between the tendency towards global fragmentation and the efforts to maintain cross-border cooperation in an increasingly polarized world.
Responding to this phenomenon, Indonesia is actually one of the countries that has the potential to stand out in this new landscape.
Its strategic location, wealth of resources, and relatively neutral foreign policy stance make it an attractive destination for capital seeking a safe harbor. As the world becomes more divided, stability becomes the most valuable commodity. And in that map, Indonesia can position itself as a promising new regional economic node.
Sectors such as infrastructure, energy, mining, and finance will be the center of attention. Blue economy-based development projects, resource exports, and the stability of the national financial system are the main attractions.
In conditions like this, investment strategies must also shift from conventional patterns to more diverse, more defensive, and long-term oriented allocations.
Hedging assets such as gold, the US dollar, and shares of regionally strong companies will be the main choices for investors.
What needs to be recognized is that this dynamic is not a temporary disruption that can be overcome with short-term stimulus or policy. This is a sign of the times, a signal that the world is entering a new era of political economy.
The post-globalization world will be more complex, more fragmented, and full of conflicting interests. But amidst this complexity, there are also many opportunities for countries and economic actors that read the direction of change carefully.
People no longer live in a world determined by “one global market,” but in a world determined by the courage to read direction and the flexibility to adjust strategies.
In an era of uncertainty, the ability to recognize patterns and act on structural changes is the key strength. So, the end of the era of globalization is not the end of everything, but the beginning of a new chapter that requires intelligence, resilience and long-term vision. [antaranews]
