Crypto News: Is deglobalization even possible?

We're just one week away from President-elect Donald Trump's inauguration, and the return of his "America first" agenda. Businessweek Editor Brad Stone writes today about the challenge of deglobalization. Plus: The unsettling failure of GM's Cruise project, and the rapid Instagrammable rise of Ghia beverages. If this email was forwarded to you, click here to sign up.

There was once a widespread notion that the tides of globalization were as immutable as the weather. "Globalization is not something that we can hold off or turn off: It is the economic equivalent of a force of nature, like wind or water," US President Bill Clinton said during a speech in Hanoi in 2000. His British counterpart, Prime Minister Tony Blair, concurred at a Labour Party conference in 2005. "I hear people say we have to stop and debate globalization. You might as well debate whether autumn should follow summer. They're not debating it in China and India. They are seizing its possibilities, in a way that will transform their lives and ours."

That prevailing metaphor—which assumes that the world is getting smaller and flatter, that borders will open and free trade will grow—has been under assault for the past decade. Over the last few months, it may have collapsed for good. President-elect Donald Trump has promised tariffs, mass deportations and withdrawals from military alliances and multinational agreements on climate change. Moderates have suffered significant political defeats in Canada, France and the UK, while the German government of Chancellor Olaf Scholz, a Social Democrat, fell outright, paving the way for elections in February that may see the rise of nationalist parties. Meanwhile, world leaders have almost universally retreated from the idea that, despite short-term discomfort, globalization will make everyone better off.

Electric vehicles for sale at a distribution center in Chongqing, China. Photographer: Li Hongbo/VCG/Getty Images

What happened? Over the past 40 years, economic growth in China soared as markets opened to the country's products, and 800 million Chinese citizens escaped poverty. The impact in developed nations was much harsher. While the rich got richer, minting nearly 700 more billionaires in the US alone since 1990, manufacturing hubs in the US and Western Europe were hollowed out, and the middle class stagnated. The cumulative effect scarred the electorate, setting the stage for unorthodox politicians and would-be autocrats rushing to show that globalization was anything but inevitable. "Clearly the narrative was faulty, and the physical metaphor was wrong," says Dani Rodrik, a professor at the Harvard Kennedy School. "Globalization didn't fall in our laps from the sky. We made it, and we could remake or unmake it."

We're now in the age of so-called deglobalization, with countries prioritizing their national interest over the global good. But look more closely and the picture is blurred. The volume of global merchandise trade was up 3.3% through the third quarter of 2024 from the same period a year earlier, according to the World Trade Organization. This vibrant global market has minted entire industries. China's subsidies of its domestic green industries have led to the rise of companies such as BYD Co., which ships cheap electric vehicles around the world, and a sharp decrease in the cost of technologies like solar panels and batteries. The Joe Biden administration, which adopted many of the tariffs from Trump's first term, funneled $300 billion into clean energy initiatives via the Inflation Reduction Act of 2022, partly in anticipation of vigorous international demand for reducing climate emissions.

In many industries, you'd never know globalization is supposedly in retreat. "I'm not a big fan of the word 'deglobalization,'" says Karen Harris, managing director of the Macro Trends Group at Bain & Co. "While there's certainly a drive to not be as dependent on unreliable partners on national security issues, China and the US are pursuing other aspects of the global economy."

These complicated dynamics have put proponents of globalization in an awkward spot. The World Economic Forum, which will hold its annual gathering of business and political elites next week in Davos, Switzerland, has been reckoning with this situation. "National interest is now at the core, global interest less so," says Børge Brende, president and chief executive officer of the forum. However, "trade and investments have been the driving engine for growth over the last decade, and growth is also prosperity."

Brende still sees opportunities for global agreement on pandemic control, cybersecurity and other issues. The rapid expansion of technologies such as artificial intelligence, he adds, will require multilateral coordination. Allowing AI to grow unchecked—to be integrated into nuclear weapons, for example—would be catastrophic. Just like rapid globalization was welcomed until public majorities concluded the bad outweighed the good, deglobalization will also challenge its underlying consensus—and maybe sooner than everyone thinks. As Brende says, "We have to try to create some order in a disorderly world."

In Brief

Sonos CEO Patrick Spence is leaving after eight years in the job, a move that follows a botched app revamp that upset customers and stymied growth.
Bill Ackman's Pershing Square proposes a merger with Howard Hughes, seeking to turn the company into a "modern-day" Berkshire Hathaway.
Talks between Israeli and Hamas envoys to pause the 15-month war in Gaza are making progress.

What the End of Cruise Says About the Future

Photographer: Matthew Porter for Bloomberg Businessweek

In mid-December, Mary Barra, chief executive officer of General Motors Co., dialed into a conference call with analysts and announced a decision to "realign our autonomous driving strategy." The company was shutting down development of its driverless cars—run by a subsidiary known as Cruise—and would fold the team into the part of GM that works on software for its regular lineup. Barra said this was about "accelerating the path forward, providing customers meaningful benefits along the way."

What was presented as a strategy shift was also a profound admission of failure. For years, Barra—like many executives in the tech and auto industries—spun a fantastical vision of the future in which fleets of so-called robotaxis would imminently replace normal cars. The technology was already developed, according to GM's boss; the only thing left to do was scale it up. "We're here. It's happening now," she boasted at the 2023 South by Southwest Conference in Austin. She routinely claimed that GM, which has annual revenue of roughly $50 billion, would make an additional $50 billion per year from robotaxis by 2030.

These predictions turned out to be outlandishly optimistic, relying on questionable data and technical kludges that made the company's software look more sophisticated than it actually was. Perhaps more unsettling, amid a boom in artificial intelligence technologies that has companies large and small contemplating replacing large numbers of human workers with modified chatbots, Cruise was hardly alone in overpromising. The company's failure not only offers a cautionary tale for others attempting to sell robotaxis, especially Elon Musk's Tesla Inc. and Google's parent, Alphabet Inc., but also suggests that the wild promises of operators of AI chatbots (and the companies that depend on these chatbots to justify their sky-high valuations) should be met with caution, if not outright skepticism. After all, autonomous driving was supposed to be the easy part of AI.

Despite its failure, Cruise got as close as almost any company has to operating a viable commercial driverless car service, Max Chafkin writes. The problem was, it wasn't very close at all: Why AI Investors Should Worry About the Self-Driving Car Crash

A Drink With Social Media Savvy

Photographer: Molly Matalon for Bloomberg Businessweek

If you don't know what Ghia is, you may not be as cool as you think you are. This past holiday season, the nonalcoholic apéritif seemed to be everywhere. In-the-know shopping and retail newsletters such as Gloria and Good Thinking suggested it to their readers. New York magazine and Bon Appétit recommended Ghia products, too. GQ called one of its sets a "reflection of good taste all round," while the New York Times' Wirecutter ranked it "one of the more complex, balanced apéritifs."

"It's a drink for the Instagram girlies—but it's not, like, a Stanley Cup girl," says brand strategist Chris Danton, distinguishing between chic influencers and more basic ones. The co-founder of the branding agency In Good Co., which publishes Good Thinking, says Ghia has "a much more design-forward, foodie, appreciates-a-good-cocktail, darker, kind of moodier" vibe.

Amid increasing competition within the nonalcoholic market, Los Angeles-based Ghia has been able to stand out by creating a product that's viewed as not only unique but also simply hip.

Lily Meier talks with Ghia founder Mélanie Masarin about the brand's success: The Drink That Instagram Built

LA Fires

12,000

That's how many buildings have burned down across over 40,000 acres in the Pacific Palisades and Altadena neighborhoods of Los Angeles, killing 24 people. Los Angeles and the rest of Southern California face a second week of fierce winds that are turning wildfires into blowtorches.

Unruly in the Air

"We fail to understand why passengers at airports are not limited to two alcoholic drinks. This would result in safer and better passenger behavior on board aircraft."

Statement from Ryanair

The Irish low-cost carrier is pressing European authorities to limit the sale of alcohol at airports, renewing calls for a crackdown after a spate of costly passenger disruptions.