As the global economy is on the verge of significant transformations, the “bi-globalization” concept is gaining more and more attention as a potential new model for international trade and cooperation. Partially triggered by Trump administration protectionism measures and trade wars, bi-globalization trends are expected to accelerate in the near future. In a nutshell, bi-globalization is a state of fragmented interconnectivity between two major distinct economic poles (such as the U.S. and China, for example). The shift in economic flows and rising bi-polarization will undoubtedly trigger effects for low and middle-income countries. We asked several experts to explore the definition, benefits, and challenges of bi-globalization in the current economic landscape.
Key Takeaways:
- Bi-globalization marks a shift from traditional multilateral trade agreements to self-reliant economies, where bilateral partnerships, technological leadership, and national security shape trade policy.
- The Trump administration’s protectionist policies, including the proposed tariffs and the emphasis on ’America First,’ have intensified bi-globalization trends.
- According to experts, leveraging regional alliances while revitalizing multilateral institutions can foster fair competition, innovation, and collective problem-solving to align national security with global prosperity.
- As wealthier countries tighten trade policies to protect domestic industries, LMICs could face higher barriers to entry and find themselves more isolated in the global trading system.
DevelopmentAid: How do you define “bi-globalization” in the current global trade context, and what are its key features?
University of Cambridge
“Unipolar globalization met its eagerly anticipated demise by many in 2022, with the Ukraine war constituting the impetus for redesigning the patterns of world trade and economic power. Welcome to the age of strategic realignment, where nations carve spheres of influence and redefine economic partnerships based not on profit or efficiency considerations but on raw geopolitical exigencies. For millennia, trade has been (mis)used as a tool to advance a host of unrelated objectives – often including broader societal, ideological, strategic and political issues. More than ever before, this has come to the fore during the past three decades. On one hand, the scope of principle-laden judgments has expanded dramatically, frequently to include highly controversial issues, (e.g. identity politics), whilst the willingness of countries to impose restrictions or provide preferences based on ‘shared values’ has grown exponentially. The Trump administration’s protectionist policies, including the proposed tariffs and the emphasis on ’America First,’ have intensified this trend. Par for the course, the event that actually precipitated the initiation of bi-globalization, i.e., the imposition of punitive sanctions against Russia (which in the meantime became the ‘most economically sanctioned nation in history’), backfired spectacularly by rapidly consolidating an alternative non-western trading bloc. Not only were these drastic measures utterly ineffective, but they brought together a number of countries, initially based on the BRICS coalition, that were ready to challenge an unsatisfactory for them status quo by implementing a new commercial bloc, which is speedily heading towards de-dollarisation. Accordingly, as countries seek to reduce their dependence on the U.S. dollar, alternative trade blocs are exploring the use of other currencies and novel payment systems. This shift is driven by a desire to insulate economies from U.S. financial sanctions and to promote greater financial autonomy.”
“Bi-globalization marks a shift from traditional multilateral trade agreements to self-reliant economies, where bilateral partnerships, technological leadership, and national security shape trade policy. While protectionist measures bolster domestic industries and economic resilience, they also intensify trade fragmentation, posing challenges for smaller economies that are reliant on multilateral agreements. This era is defined by trade and technology fragmentation, with blocs prioritising localized production and innovation. Nations increasingly adopt “friend-shoring” and strategic decoupling from geopolitical rivals in critical sectors such as semiconductors, AI, and cybersecurity. Trade agreements now favor bilateral or regional frameworks, granting governments more control, while digital trade regulations and cybersecurity concerns further divide competing blocs.”
“Bi-globalization is a paradigm that recognizes the coexistence of multiple global systems that influence and shape the world in diverse ways. In the global trade context, bi-globalization suggests that instead of a singular global marketplace, there could be two or more dominant systems or ideals that drive global exchanges. Bi-globalization is also transactional, in the sense that the idea of bilateralism is important. Two nations that belong to one bloc may not automatically belong to another bloc. Example: NATO and AUKUS. ”
“Bi-globalization reflects a departure from the traditional notion of a single, unified global marketplace, where shared rules and cooperative frameworks broadly drove economic integration. It is the emergence of two distinct, yet interconnected (due to the transition from Unified Global Marketplace) spheres of global economic and trade activity, often aligned with geopolitical blocs. The key features are parallel trade systems, geopolitical fragmentation, and even technological decoupling by diverging standards.”
“I understand bi-globalization as the next step in the open regionalism process, where groups of like-minded countries pursue deeper cooperation, often excluding those with divergent visions. This concept mirrors Cold War dynamics, where blocs such as the Warsaw Pact (CAME) and the Western powers were driven by ideological alignment rather than broad multilateral agreements.”
DevelopmentAid: With rising protectionism and shifting trade alliances, do you see bi-globalization as a viable alternative to multilateral trade agreements?
University of Cambridge
“Viable or not, it is quite inevitable and will presumably continue to gain traction. Bi-globalization was one of the main buzzwords of the 2025 World Economic Forum in Davos – and for a good reason. What we observe is not merely a reshuffling of trade routes; instead we are presented with an ab initio rethinking of how state economies interact. The new framework prioritises strategic autonomy over blind interdependence, as countries recalibrate policies and forge alliances that balance economic cooperation with national security concerns. The imposition by USA of new tariffs on China, Canada and Mexico, along with broader export restrictions, exemplifies the use of trade as a geopolitical tool, driving nations to form alternative trade alliances. From tech decoupling to industrial policy overhauls, such moves will not be random but part of a deliberate strategy to navigate a more precarious global order. Observers are witnessing the emergence of two (for the time-being, at least) parallel systems, each with its own rules and priorities. These hubs of economic activity are expected to operate not in isolation but through carefully managed competition. As things stand now, the emphasis will be less on severing commerce ties and more about creating resilient alternatives that reflect the realities of today’s contested global economy. For instance, the newly-elected US administration has vowed to renegotiate USMCA/NAFTA and increase import duties for its partners. This will probably not signify the end of North American trade but rather a reduction of ‘commerce super-highways’ and an augmented attention to local production and job-creation. Interestingly, the International Monetary Fund has estimated that similar trade restrictions could reduce global economic output by an astonishing 6 trillion EUR. Bi-globalization is accompanied by technological decoupling, where countries aim to develop independent industrial capabilities. This is particularly evident in the predicted U.S.-China trade war, where both nations seek to reduce their reliance on each other’s technologies. This decoupling extends to 5G networks, artificial intelligence, and semiconductor manufacturing. The Ukraine war, hot on the heels of the COVID-19 pandemic disruption and recent geopolitical tensions, has highlighted the vulnerabilities of global supply chains Incidentally, if the European Union does not engage in a major reconsideration of its geo-economics priorities, it may end up as the major loser in this 21st century realignment, falling in the interstice between the US-led and the Russia-China grouping.”
“Although bi-globalization enhances flexibility and supply chain resilience, it cannot replace multilateral frameworks, which remain essential for inclusive growth, global standards, and addressing shared challenges like climate change. A hybrid strategy — leveraging regional alliances while revitalizing multilateral institutions — can foster fair competition, innovation, and collective problem-solving to align national security with global prosperity.
“Multilateralism locks traders into a certain framework, into a set of rules. Those rules are set by the multilateral agency and may not always suit the interests of the participant nation at a given time. The bi-globalization model is more flexible and might be a viable model in a world in which many systems coexist and threats and opportunities arise frequently. Example: PARIS ACCORDS, STRIPPING OF USAID.”
“I do not see it as a viable or desirable substitute for multilateralism. Bi-globalization fractures global markets, leading to duplicated supply chains, increased costs, and inefficiencies. For example, competing technological standards will limit economies of scale and drive up costs for consumers and businesses. Bi-globalization risks hardening divisions into outright economic conflicts. Escalating tariffs, sanctions, or decoupling efforts could lead to an economy of the world that is less stable and more adversarial, which again will place additional weight on customers and businesses.”
“In the current global trade context, the key features of bi-globalization include the formation of exclusive trade alliances, targeted economic partnerships, and a shift away from global consensus. These include bilateral and regional agreements aiming to create more integrated and freer spaces for cooperation within specific groups, often at the expense of third parties. An example of this is the European Union, now elevated to a global scale. With rising protectionism and shifting trade alliances, bi-globalization could offer a viable alternative to multilateral agreements by fostering more direct, reciprocal relationships between aligned nations. It is, in essence, a strategy that recognizes the limits of global free trade to address the needs of individual countries, advocating for a more localized approach. This makes it a protectionist strategy, focusing on the internal benefits of cooperation over global integration.”
DevelopmentAid: What are the main challenges of bi-globalization, especially for low- and middle-income countries with limited bargaining power on the global stage?
University of Cambridge
“Under the strain of an emerging bipolar power structure and new forms of geo-economics competition, the ‘liberal international order’ has already crumbled. The institutional frameworks and rules that still provide a minimal sense of predictability in international trade are mere remnants of a bygone era, akin to troops garrisoned along Hadrian’s Wall nearly a century after the end of the Roman imperium. The emerging situation will represent a boon for smaller players in the international arena: gone will be the days when their commerce was stymied due to antagonistic foreign policies or particular dress codes imposed on women. A valid alternative has opened up and everyone is welcome, provided they do not push a ‘liberal western agenda’. Globalization, once touted as a driver of prosperity, has increasingly been viewed with suspicion by the majority (including in the West), with electorates becoming more vocal about job security, self-sufficiency and national sovereignty. In classical Marxist fashion, early 2000s globalization was expected to inaugurate political, societal and cultural homogeneity through the intensive intervention on the economic base which would eventually reflect on the superstructure. When people realized that the removal of centuries-old guardrails could result in a Darwinian survival of the fittest, the days of unipolar globalization were numbered. By embracing this recalibration, smaller nations can navigate the challenges of systemic change while seizing opportunities for a more balanced and self-sufficient growth. Nevertheless, bi-globalization — by its very design — is a step away from the multilateral systems that have historically allowed LMICs secure access to large markets. As wealthier countries tighten trade policies to protect domestic industries, LMICs might face higher barriers to entry and find themselves more isolated in the global trading system.”
“In this fragmented landscape, LMICs must navigate alliances and regional partnerships to maintain economic sovereignty and access global markets. Investing in digital infrastructure, technological skills, and sustainable industrialization will be crucial to ensure competitiveness, resilience, and independence in a bi-globalized world.”
“Indeed, low-income countries don’t have a lot of tools, and they may be challenged in a transactional environment. However, low-income countries might consider overcoming those challenges by using the transactions at their disposal as bargaining tools. Because a bi-globalized world is still a globalized world, they have access to a wide range of transactions within a bloc.”
“Countries with low and middle income, particularly in the Global South, may struggle to navigate between competing blocs or face marginalization due to their limited bargaining power. These challenges stem from their economic vulnerabilities, dependence on larger economies, and difficulties navigating competing geopolitical pressures. Also, they are often forced (due to their limited economic power) to align with one bloc, limiting their ability to pursue diversified trade relationships. Choosing a side may alienate important trade partners and block access to certain markets, or financial resources. These countries often depend on foreign investment, aid, and trade with larger powers in both blocs. Changes in trade policies, tariffs, or sanctions could destabilize their economies. In conclusion, bi-globalization introduces significant risks and complexities for low- and middle-income countries, which could deepen existing inequalities and vulnerabilities.”
“The main challenge of implementing bi-globalization lies in the asymmetry between economies within these alliances. Similar to the European Union, countries like Italy or Spain struggle to compete with larger economies like France or Germany. Furthermore, the bi-global model restricts smaller countries from engaging with other blocs, essentially creating a “geographical prison” for nations trapped within their regional confines, limiting their ability to expand their trade opportunities beyond these boundaries.”
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