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How will ‘friendshoring’ impact global trade in 2024?

Trade costs are expected to rise as political proximity increasingly trumps commercial convenience for the US and China. By Aliya Shibli, The Banker

With political tensions increasingly impacting global trade relationships — in particular between China and the US — the term ‘friendshoring’ has entered the vernacular, representing the realignment of trade networks along geopolitical lines.

The United Nations Conference on Trade and Development (UNCTAD) last month noted a significant rise in the political proximity of trade since the second half of 2022, suggesting a shift in bilateral trade preferences toward countries with similar geopolitical stances, leading to a concentration of global trade within major trade relationships.

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