{"id":827943,"date":"2025-03-20T08:04:13","date_gmt":"2025-03-20T12:04:13","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/shifts-in-trade-and-national-security-priorities-split-globalization-into-two-tracks-pgim-research-finds\/"},"modified":"2025-03-20T08:04:13","modified_gmt":"2025-03-20T12:04:13","slug":"shifts-in-trade-and-national-security-priorities-split-globalization-into-two-tracks-pgim-research-finds","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/shifts-in-trade-and-national-security-priorities-split-globalization-into-two-tracks-pgim-research-finds\/","title":{"rendered":"Shifts in Trade and National Security Priorities Split Globalization Into Two Tracks, PGIM Research Finds"},"content":{"rendered":"

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Shifts in Trade and National Security Priorities Split Globalization Into Two Tracks, PGIM Research Finds<\/b><\/p>\n

NEWARK, N.J.–(BUSINESS WIRE<\/a>)–
\nTariffs, trade restrictions and geopolitical tensions dominate today\u2019s headlines, but despite a spike in volatility in the short term, a more nuanced assessment highlights that globalization has not been derailed. On the contrary, it has been divided into two distinct and separate tracks \u2014 with a majority of sectors and trade patterns continuing at high speed, and a smaller but critical part of the economy sharply deglobalizing, according to new research from PGIM<\/a>, the $1.38 trillion global investment management business of Prudential Financial, Inc. (NYSE: PRU<\/a>).*\n<\/p>\n

This press release features multimedia. View the full release here: https:\/\/www.businesswire.com\/news\/home\/20250320258184\/en\/<\/a><\/p>\n

\"\u201cRising<\/p>\n

\u201cRising geopolitical tensions and expanding trade restrictions may appear to signal the globalization pendulum has swung hard in the opposite direction, pitting national interests against a shared global good. Yet the reality is far more nuanced.\u201d — Shehriyar Antia, Head of Thematic Research, PGIM<\/p>\n<\/div>\n

\nFor investors, this \u201cdual-track\u201d world offers new opportunities and risks across countries and industries such as AI, high-end semiconductors, 5G telecommunication networks, critical minerals, fossil fuels, electric vehicles and military technology, highlighting the need for stress-testing portfolios and managing strategic investments within a dynamic and fragmenting global economy.\n<\/p>\n

\nIn \u201cA New Era of Globalization<\/a>,\u201d PGIM\u2019s Megatrends research team dives into the concept of this dual-track globalization era, finding that despite recent tariff activity and the prospect of a prolonged trade war, around 75% of the global economy remains on the \u201cfast track\u201d of globalization \u2014 reliant on efficient global supply chains and not reined in by national security concerns.\n<\/p>\n

\n\u201cRising geopolitical tensions and expanding trade restrictions may appear to signal the globalization pendulum has swung hard in the opposite direction, pitting national interests against a shared global good. Yet the reality is far more nuanced,\u201d said Shehriyar Antia, head of Thematic Research at PGIM. \u201cEven if America\u2019s \u2018small yard\u2019 of protected industries grows larger, roughly 80% of global trade happens beyond U.S. borders, and companies in most industries will still seek out the benefits of free trade and competitive advantage.\u201d\n<\/p>\n

Investment opportunities exist despite new risks in trade and supply chains<\/b><\/p>\n

\nInvestors shouldn\u2019t ignore industries on the decelerating track of globalization simply because of the presence of tariffs and industrial policy. Instead, they should consider the structural advantages that specific companies and parts of the value chain may have over others:\n<\/p>\n

Artificial intelligence and advanced semiconductors<\/b> \u2013 The great power rivalry between China and the U.S. is creating a more fragmented market for the advanced computer chips critical to AI applications. However, industry leaders like TSMC (Taiwan Semiconductor Manufacturing Company) have customers across multiple segments and have already begun diversifying their geographic footprint to address regional risks.\n<\/p>\n

Electric vehicles \u2013<\/b> Manufacturers such as Tesla and China\u2019s BYD have taken an early lead as the world shifts to EVs. Despite facing steep tariffs in Europe and the U.S., BYD has growth opportunities in Southeast Asia, Latin America and the Middle East, and is stepping into the luxury market. Tesla is leaning into self-driving taxis with mass-market potential.\n<\/p>\n

U.S.-Mexico border industrial real estate \u2013<\/b> Despite a dynamic and unsettled environment around trade between the two nations, near-shoring momentum creates a tailwind for industrial real estate along the U.S.-Mexico border, with steady demand from large multinational manufacturers and requirements to re-freight cargo that arrives on U.S. soil.\n<\/p>\n

Metals and minerals \u2013 <\/b>Projected long-term demand for metals like copper, critical to several major industries, currently exceeds supply. Two pure-play copper miners \u2014 Ivanhoe Mines and Ero Copper \u2014 may offer solid growth prospects, while Southern Copper and Freeport-McMoRan are large diversified producers with economies of scale.\n<\/p>\n

Identifying national winners<\/b><\/p>\n

\nInvestors may find attractive opportunities in countries well-positioned to become near-shoring candidates \u2014 with existing manufacturing capabilities, privileged access to free-trade zones or comparative advantages in their business environment and labor costs:\n<\/p>\n

Americas:<\/b><\/p>\n