Will the Coronavirus Kill Globalization?
At a dinner party in mid-February, an architect told me that he was having a problem finishing his building projects. It was the carpets. Most wall-to-wall carpeting for big construction projects in the United States, he explained, comes from China. The coronavirus outbreak in Wuhan — and the subsequent shutdown of many Chinese factories — was having a ripple effect across the global economy all the way down to the carpeting in US buildings.
The global spread of a new pathogen has exposed the fragility of modern life. As it moves around the world, the coronavirus has compromised the circulatory system of globalization, dramatically reducing the international flow of money, goods and people. The disease has done so rather economically, by infecting fewer than 100,000 people so far. Extrapolation and fear have done most of the work for it.
In the world of things, the coronavirus has infected the global supply chains that connect manufacturers and consumers. Port traffic in Los Angeles, the largest US port, declined by 25% in February. Container traffic in general was down over 10% last month. Manufacturers that depend on the sourcing of components in far-off countries had already been rethinking their participation in the global assembly line because of tariffs, the costs of transport and increased automation. This “reshoring” will get a boost from the disruptions of the coronavirus.