Over 2,500 years ago, Athens created the Delian League, an alliance of over a hundred Greek cities to campaign against the Persians to the bitter end. All swore to have the same friends and enemies as the Athenians and threw iron blocks to the bottom of the sea to symbolize their commitment: they would only retrieve them when the metals resurfaced. Several decades later, Athens used the economic power and influence it had accumulated through that alliance to suffocate the city of Megara, which had rebelled against it: it decreed the first commercial embargo in history and expelled it from all markets and ports of the League.
From the classical world to the Cold War, the economy has never been politically neutral. The most powerful countries in the world have used supply chains as instruments of power comparable to their armies and have typically preferred to shake hands with friends rather than trade with enemies. But this ancient economic logic, now called friendshoring, is taking on a new dimension. Because political affinities and phobias have begun to gain ground over the financial logic of an increasingly interdependent global market, and therefore more vulnerable to its own loyalties (and betrayals).
In their eagerness to measure everything, economists have designed a formula to check how far apart in the political spectrum the money and goods from a particular country are from their final destination. That is, how economic flows between the different states of the world evolve based on their voting patterns in the UN. This is known as the geopolitical distance of trade and, according to a recent report by the consulting firm McKinsey, it is narrowing. Globally, it decreased by 1.2% between 2024 and 2025, a more pronounced cut than the average annual decline recorded in the previous seven years (2017-2024), of around 0.9%.
"By the end of 2025, US tariffs reached their highest level since World War II. These increases reshaped trade along geopolitical lines, deepening a realignment already underway and redirecting over $165 billion in trade outside the US-China corridor," the firm noted. Despite this, and the increasing competitive pressure on the European Union, world trade did not collapse. Both US imports and Chinese exports reached new highs, albeit only after finding alternative routes.
No, globalization is not dead or heading that way. Although the most pessimistic - or the most optimistic, depending on the country from which you look - prophesied the end of the era of markets when the COVID pandemic exposed the vulnerabilities of the world's most advanced economies. But, as the report confirms, tons of smartphones are sent each year from India to stores in the United States, covering a whopping 13,000 kilometers.
"Goods continued to travel longer geographical distances, but flowed increasingly between geopolitically aligned partners. The routes changed, but trade continued to expand," McKinsey concludes. In 2025, the average distance of global trade in goods was approximately 5,200 kilometers. Although it has slowly and steadily increased since 2017, by around 0.2% annually. In other words, countries trade more with their allies, even if they are far away, than with politically distant neighbors. Even if that means extending their supply chains.
"We are not witnessing the end of globalization, but the end of geopolitical neutrality and the establishment of a new world order and, most likely, new rules of the game. McKinsey has found that between 2017 and 2024, the average geopolitical distance of world trade fell by around 7%, while the geographical distance not only did not decrease but increased," analyzes Manuel A. Velázquez, senior partner at ERA Group, whose work involves monitoring commodity prices to help companies manage their costs.
The data, Velázquez points out, contradicts the idea of a relocation of supply chains to nearby environments because "goods continue to travel halfway around the world." However, more and more are following "strategic trust circuits." For the expert, the so-called friendshoring is translating into "more trade, but more selective". The conflict in Iran and the fracture of trade through the Strait of Hormuz - one of the major bottlenecks of the global economy - have once again shown how much geopolitical distance now weighs more than physical distance.
China or dangerous friendships
On April 2, 2025, Donald Trump shattered the trade rules that diplomacy had built after World War II with an unprecedented tariff package. The global economy staggered, but a year later, global trade is holding up, and all reports indicate that the main casualties of the trade war have been US companies themselves. "The good news is that the rest of the world has not retaliated, there has not been a real trade war," emphasizes Federico Steinberg, Prince of Asturias Professor at Georgetown University and principal researcher at the Elcano Royal Institute.
Speaking from Washington, Steinberg describes Trump as a "constant source of uncertainty" and asserts that with his policies, he seeks the "increasing isolation of the United States from the rest of the world." He states that the distancing of the American power from China, the fact that they are trading less and less, is causing a "rebalancing" of global trade flows. "There is a change in ideological paradigm. Hyperglobalization is behind us, and now more importance is given to security. The European Union has accelerated the signing of agreements. India, Indonesia, Australia, Mercosur... This is a direct result of the crisis of the rules-based multilateral order, which is not compatible with tariffs or military attacks without legal coverage."
"China represents the great danger for Europe: it is the economy that is coming to eat our bread"
While Steinberg acknowledges that the relationship between the United States and the European Union is "the most powerful in the world" and that it "does not disappear overnight," he also does not deny that Trump's constant threats are paving the way for closer ties between Western leaders and China. German Chancellor, Friedrich Merz, during a late February visit to Beijing, expressed willingness to "deepen" ties with the Asian country and aligned with Xi Jinping in favor of "free trade" over "protectionism," in a veiled reference to Trump's trade policy.
This week, on his fourth visit to China, Pedro Sánchez placed both countries on the same level to defend "multilateralism" against "the return of the world to the law of the jungle," and signed three memorandums with the Chinese government to strengthen economic exchange. In a world of friends and enemies, is Beijing the friendship Europe needs?
According to data from the Spanish Institute for Strategic Studies (IEEE), the European Union has the most open economy. The sum of its commercial relationships (imports and exports) accounts for 55% of GDP, compared to 45% for China and 25% for the US. Additionally, it is the world's largest exporter of manufactured goods and services. The problem is that Beijing has already included many of these, from automobiles to renewables, in its expansion map.
"One thing is to maintain a certain equidistance to have a stronger position against the United States, but a geopolitical alignment with China is a mistake. There are no points of alignment, neither in human rights nor in global rules or sovereignty, much less against Russia... It is a European mistake, not just Spain's, to think that we have to align with China when what we should do is become more independent, both from China and the United States," states Ángel Saz-Carranza, director of EsadeGeo.
For the expert, the major mistake of the Twenty-Seven is to approach the relationship with Beijing individually. "It is a mistake, above all, to do it at the country level. When a government, any government, goes there alone to see if they can get a couple of investment agreements and comes back all happy, when a unified European position will always be more powerful and reciprocal," he reflects. In fact, he considers that China represents the "great danger" for Europe because it is "the economy that is coming to eat our bread," as it is "clearly positioning itself more and more towards high industrial value," a field that Europe has historically led.
Steinberg reinforces the warning. "The problem is that the relationship between Europe and China lacks reciprocity. An economist will tell you that it is excellent news for the consumer, who will have access to cheaper goods or services, but against that, the risk is the rapid deindustrialization of Europe," he concludes.
The plate of spaghetti
Statistics support the breakdown between fronts and the increasing polarization of economic relations. "The IMF has warned that, after the invasion of Ukraine, trade and investment between geopolitical blocs have fallen by approximately 12% and 20% more than flows within each bloc," Velázquez reinforces. But neither money nor goods disappear; on the contrary, they are becoming a business opportunity for certain well-positioned intermediate regions.
Saz-Carraz points out that, to overcome barriers, Beijing has started to "de-China-fy." For example, by setting up factories in Mexico as a bridge country to introduce its products into the US with a different origin, thus avoiding barriers and political tensions. The expert acknowledges that this is reshaping trade flows, as there are regions that are absorbing and redirecting imports and exports, allowing globalization to remain at a plateau. Although it is not clear to what extent these factories create local value or are simple assembly plants. "Globalization is very difficult to dismantle; the previous system only collapsed after two world wars..." Steinberg reinforces.
On one extreme, the United States is neither predictable nor as available in terms of security. On the other, Chinese competition threatens the rest of industrial ecosystems. Therefore, the European Union and other medium powers are reorganizing trade governance. The result? The world is transitioning from having a central structure based on global rules to a complex network of agreements. Saz-Carranza defines it with the concept of the "plate of spaghetti," a tangle of bilateral alliances with which these countries try to "keep the world united" or, failing that, maintain minimal rules that make this new global economy viable.
The world's largest multinational companies are already responding to this adjustment. "Leading companies are not deglobalizing their purchases; they are redesigning them. There are clear trends such as supplier diversification or analyzing the full supply chain traceability. Ensuring supply continuity is something that companies are willing to pay a premium for. "Price is no longer the main variable when selecting suppliers; now a combination of factors is sought: stability, compliance, and real response capacity," Velázquez concludes.