A global system of full economic integration'the aspiration of decades of negotiations and the worldwide underpinning of corporate strategy'has never been fully realized. The latest round of global trade talks sputtered to an inconclusive end in the early 2010s. But even as views on the benefits and fairness of the system diverged among countries, there was no overt challenge to the framework of global trade. That changed on April 2, 2025, when US tariff announcements revealed in stark fashion some of the underlying discontent with this construct. This article is a collaborative effort by Sven Smit, Shubham Singhal, Olivia White, Ezra Greenberg, Jan Mischke, Matt Watters, Cindy Levy, and Rebecca J. Anderson, representing views from McKinsey's Geopolitics and Strategy & Corporate Finance Practices and the McKinsey Global Institute. In the weeks since the announcements, share prices and the US Treasury market have gyrated. Expectations of US inflation have spiked. Consumer confidence...
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