Old trade routes risk falling short
A study by Allianz examines current trade routes and observes their development, as well as the effects of geopolitics, climate change, and other influences, and the question of new opportunities. In a world divided by geopolitics, protectionism, and the effects of climate change, global trade is forging new paths.
Profound transformation
The global trade system is undergoing a profound transformation, driven by geopolitical fragmentation, strategic realignments and structural supply-chain challenges. The US is moving imports away from China, the EU has sharply cut trade with Russia in favor of
other partners and China’s trade is now dominated by developing economies in Asia, Latin America and Africa that are increasingly substituting for US goods – starting from agriculture.
Overload routes
Meanwhile, overland routes such as the Middle Corridor (through Central Asia and the Caucasus) have gained momentum, particularly following Western sanctions on Russia. Infrastructure projects under China’s Belt and Road Initiative have accelerated this shift as countries seek faster and more stable connections between East and West. The broader imperative is clear: the creation of cost-effective, diversified and geopolitically secure logistics networks.
Mitigating geopolitical risk
Global trade has become regionally concentrated. Since 2017, and especially since 2022, it increasingly occurs among geopolitically aligned economies. This is reflected in declining flows between distant and very distant partners (Figure 1). Mitigating geopolitical risk is vital. A +10% rise in geopolitical distance reduces bilateral trade by -2%, underscoring the importance of political alignment. Friendshoring has a larger, more measurable impact on trade flows than nearshoring, driving investmenTt into new logistics corridors and infrastructure investment projects. Structural shifts in global consumption and industrial production are being matched by geographic shifts in trade.
Find the detailed research results in the source description.