The coronavirus pandemic has called into question several assumptions which have underpinned global trade for decades. By the time the dust settles, the world’s approach to trade could look quite different.

Although this reconsideration predates the pandemic, extended global supply chains will make far less sense in the post-COVID-19 world. The highly touted economic efficiencies generated by extreme specialisation of production and just-in-time inventories will now be weighed against the vulnerabilities they embed across global supply chains if even just one link in the chain breaks down. Rising economic nationalism and strategic rivalries further exacerbate these vulnerabilities.

In the balance between economic efficiency and security of supply, the pendulum is swinging back towards security. This shift will apply not only to essential medical supplies but across the full spectrum of trade. Recall how many automotive production facilities, in South Korea, Japan and elsewhere, suspended operations at the onset of the coronavirus outbreak when the flow of critical components from China was interrupted.

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