Trade and industrial policy are becoming increasingly securitized, with tariffs, subsidies, export controls, and trade barriers proliferating. Economic blocs engage in trade wars and pursue decoupling, derisking, or “friendshoring” in sensitive sectors, straining the multilateral trading system, with little hope for reforming the WTO and other global governance institutions.

Yet, globalization and economic interdependencies persist. The economic and political costs of decoupling or derisking become clear and prove problematic in the light of budget constraints and the tense economic situation in many countries. Governments and businesses do not wait idly for multilateral solutions: More bilateral and regional free trade agreements have emerged, securing the flow of goods and services but creating an increasingly complicated and fragmented trade landscape. Trade-offs and difficult decisions are on the agenda, posing questions such as which products and services should be traded with whom? Which industries should be supported and with what measures?