The Great American Shift: The End of Classical Globalization
The Great American Shift: The End of Classical Globalization
According to Iran Gate News Agency, three decades after the Cold War tensions subsided, the world is once again on the brink of a profound transformation in the structure of international political economy. This transformation is marked by the United States’ strategic pivot from efficiency-based globalization to a geo-economics reliant on security and technology, redefining the future order of great power competition.
Three decades after the end of the Cold War, the world is once again at a point that could transform the structure of international political economy.
To understand the current shift of the United States, one must first know the characteristics of globalization in the previous era.
Globalization in the 1990s and 2000s was based on the assumption that reducing trade barriers, liberalizing capital movement and production, and limiting the role of governments in the economy would both increase global growth and reduce political tensions.
In this order, multinational corporations, free trade, extensive supply chains, and cheap production in East Asia were the main pillars. The United States led this process politically, financially, and intellectually, believing that integrating China into the global economy would gradually align Beijing with free market rules.
However, today the world has fundamentally distanced itself from that image following the 2008 financial crisis, the intensification of strategic competition between Washington and Beijing, the COVID-19 pandemic, and the Ukraine war. The United States has now concluded that past globalization, despite its economic benefits, has created security and industrial vulnerabilities that could threaten the country’s technological superiority and economic power.
From this point, a deep shift begins: a transition from efficiency-based globalization to a geo-economics reliant on security and technology.
This shift is embodied in Washington’s new industrial policy. Major laws passed in recent years, including the CHIPS Act to bring back semiconductor manufacturing and limit the export of advanced chips, the IRA as a large package supporting clean energy and electric vehicles, and supportive policies in the fields of artificial intelligence and biotechnology are all defined within this framework.
These regulations appear economic in nature but actually redefine the relationship between the state and the market in favor of national security. After decades of reliance on the free market, the United States now sees the active role of the government as essential in guiding strategic sectors, not to replace the market but to steer competition in areas where technology and power are intertwined.
At the heart of this transformation is the increasing linkage between security and economy. Washington now views trade not merely as an economic activity but as a tool for managing geopolitical competition.
Export restrictions on advanced chips, control over the transfer of quantum and artificial intelligence technologies to rivals, oversight of foreign investments in sensitive industries, and pressure on international partners to coordinate in limiting China’s technology all indicate that in the new order, technology equates to power, and maintaining technological advantage is considered a condition for survival and dominance.
The consequence of such an approach is the movement of the world towards the formation of two economic circuits. One circuit forms around the United States and its allies, where their technology standards, financial systems, digital data, and supply chains are built on Western principles.
The other circuit expands around China and its partners, creating a parallel system in digital, logistics, technology standards, and investment instead of accepting Western rules.
These two circuits do not necessarily mean military confrontation but are indicative of the geo-economic division of the world based on technology and security. Countries wanting to establish their position in this order are compelled to decide in which circuit to participate or how to balance between these two diverging worlds.
In this context, India’s role has gained special importance. India is among the countries that have been able to benefit from this geo-economic shift. For the United States, India is not merely a political partner but a potential pole for diversifying supply chains and reducing dependency on Chinese production. Delhi’s Make in India policy, which emphasizes attracting foreign investment and developing advanced industries, has aligned with Washington’s geo-economic needs. Investments by large companies like Apple, Foxconn, and Asian semiconductor companies in India are directly and indirectly the result of this alignment.
India, with its young population, growing economy, and flexible foreign policy that avoids complete confrontation with major powers, is an example of countries benefiting from the competition of great powers to attract capital and technology.
Nevertheless, geo-economic competition is not limited to the technology sector alone; subsidy competition has also become an integral part of it. Subsidy competition—meaning government financial support to attract investment in industrial production or technology compared to rivals—has become a new tool for governments to increase economic attractiveness.
With massive subsidy packages for clean energy, electric vehicles, and domestic chip production, the United States has practically forced countries like the European Union, Japan, South Korea, and even Canada to adopt similar supportive policies to preserve their industries.
This trend has created a new competitive environment where countries, instead of reducing barriers, are compelled to offer extensive financial incentives to attract foreign investment and develop sensitive industries.
As a result, the global economic order is moving towards a new architecture. The era of globalization based on open borders and minimizing governments has now given way to a period where governments have regained a strategic role.
The issue is no longer whether the free market is more efficient or state planning, but rather that economic power is defined based on technological security, industrial independence, and control over sensitive sectors.
The rules of global trade, once based on the World Trade Organization, are now under pressure from new industrial policies, subsidy competition, and technology bloc formation.
In such a space, the United States seeks to not only maintain its distance from China by linking economy and security but also to reconstruct its leadership in the future global economic order.
The new order, instead of striving for integrated globalization, is based on creating secure supply chains, controlling key technologies, and managing strategic competition. Countries that can define their position within this shift and reorganize internally according to the world’s geo-economic needs will become influential players in the future. This great shift is not a temporary or partisan change but a long-term redefinition of the United States’ role in the world, which will fundamentally shape the global economy in the coming years.