One of the big factors that has contributed to a decline in foreign direct investment, has been US tax policy changes prompting repatriation of earnings held abroad, a legislation introduced in 2017.
Adding to this, there has been a decrease in US imports from China, even before the trade conflict between the two nations. This is being seen as 'stablising rather than shrinking relative to the size of the US economy'.
“While current geopolitical tensions could seriously disrupt global connectedness, this 2019 update finds that most international flows have remained surprisingly resilient so far,” said John Pearson, chief executive of DHL Express.
Steven Altman, senior research scholar at NYU Stern School of Business and lead author of GCI declined claims of a shift towards regionalisation. 'Our analysis does not confirm a robust regionalisation trend. Instead, we see that the average distance across which countries trade has held steady since 2012'
The GCI also remarked on discrepancy between perception and reality in regard to global connectedness. Mr Altman shared that exports actual share of GDP worldwide worldwide stood at 21% for trade, 6% for capital flows, 7% for information flows and 3% for people movement, as opposed to estimates of, respectively, 41%, 38%, 36% and 30%.
This decline doesn't seem to be showing any signs of slowing down with forecast for 2020 suggesting that trade is on track for a small decrease.
The disputes between US & China are being held partially responsible for the decreases happening in global trade with 66% of participants in a survey reporting that they had been impacted by the disruptions and operational challenges brought by the two nations.
The resolution doesn't seem to be around the corner anytime soon, with Washington showing very little willpower to co-operate with Chinese/US negotiators. President Trump said on 3rd December that a decision might be on hold until next year's presidential elections.
Authoritive bodies within the international trade industry have all stressed the negative impact that uncertainty & volatility could have on a global scale, business hope for clarity & guidance going into the new decade.