What's Happening?
Branko Milanovic, a former lead economist at the World Bank and current professor at the City University of New York and the London School of Economics, has released a new book titled 'The Great Global
Transformation: The United States, China, and the Remaking of the World Economic Order.' The book, set for release in March 2026, examines the rise of global tariffs and trade barriers, arguing that the economic trajectories of the U.S. and China have diverged significantly over the past 50 years. Milanovic suggests that this divergence has led to a major reshuffling of global incomes, comparable to the Industrial Revolution, and is driving political changes that reverse globalization trends. The book provides an analysis of income changes between the U.S. and China, critiques past economic theories, and discusses China's unique economic evolution under President Xi Jinping.
Why It's Important?
Milanovic's analysis is significant as it provides a comprehensive look at the economic and political shifts that are reshaping global trade dynamics. The rise of tariffs and trade barriers has profound implications for international commerce, potentially leading to increased nationalism and economic protectionism. This shift could affect global supply chains, international relations, and economic policies, impacting businesses and consumers worldwide. Milanovic's insights into the merging of U.S. wage earners and investors into a new labor class highlight the evolving nature of the workforce and its implications for economic policy. His perspective on China's distinct path in the global economy offers a nuanced understanding of its role in international trade and politics.
What's Next?
As global economic policies continue to evolve, businesses and policymakers will need to navigate the complexities of increased tariffs and trade barriers. Milanovic's book suggests that economic coercion is becoming a standard tool in foreign policy, indicating that trade wars and sanctions may persist. Companies engaged in international trade will need to adapt to these changes, potentially reevaluating their supply chains and market strategies. Policymakers may also need to consider the long-term implications of protectionist measures on economic growth and international relations. Milanovic's work encourages a broader understanding of these dynamics, urging stakeholders to consider the historical and political contexts of current economic trends.
