Globalization not dead, just transformed, says chief IMF economist

By the Editorial Team · Sunday, June 28, 2026

IMF chief economist Pierre-Olivier Gourinchas stated that globalization is evolving rather than ending, with global trade remaining resilient despite recent economic shocks and strategic shifts like reduced US-China trade. He warned that the future of globalization depends on whether major economies pursue broader disengagement, noting that reshoring manufacturing will likely not create substantial jobs due to automation.

The International Monetary Fund’s chief economist, Pierre-Olivier Gourinchas, said Friday that globalization is not dead but rather undergoing a transformation amid recent global economic disruptions. Speaking in an interview at the IMF headquarters in Washington, Gourinchas highlighted that despite shocks such as the COVID-19 pandemic, Russia’s invasion of Ukraine, trade tensions initiated by US tariffs, and the fallout from the conflict involving the US and Iran, global trade remains robust relative to global GDP.

Gourinchas, who is expected to step down after four and a half years at the IMF, emphasized that much of the recent trade realignment reflects a deliberate effort to reduce bilateral trade volumes between the United States and China. He characterized this shift as a well-understood strategic adjustment, noting that it does not amount to a rollback of globalization but a reconfiguration of trade relationships. Since his return to office, former US President Donald Trump implemented tariffs targeting both allies and rivals alike, aiming to reestablish manufacturing domestically and address perceived unfair trade practices.

US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer have argued that globalization had progressed too far, leading to economic hardship for American workers while benefiting foreign economies. However, Gourinchas pointed to adaptations in global supply chains, with countries such as Mexico and Vietnam playing increasing roles as alternative manufacturing hubs, helping to mitigate trade disruptions. He added that the trajectory of globalization will depend on the extent to which the United States and other advanced economies continue pushing for economic fragmentation.

“If the strategy is not just to disengage from China but to disengage more globally—which I don’t think it is—that approach would be unsustainable,” he said. Regarding efforts to reshore manufacturing, Gourinchas expressed skepticism about significant employment gains, explaining that new factories in developed nations are expected to be highly automated and less labor-intensive.

Looking beyond advanced economies, Gourinchas also addressed challenges faced by emerging markets. He pointed to concerns about a “middle-income trap” for many developing countries, particularly if global demand from major economies weakens amid inward-looking policies. Although emerging economies have demonstrated notable resilience over the past five years, largely thanks to deeper integration into supply chains, Gourinchas cautioned that this resilience has limits.

The IMF is scheduled to update its World Economic Outlook on July 8, amid close attention to potential downward revisions reflecting the economic impacts of ongoing geopolitical conflicts, including the ramifications of the war involving the United States and Iran. By that time, Gourinchas will have concluded his tenure, leaving a legacy shaped by his approach to navigating multiple crises affecting the global economy.

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