Introduction

Alex Boome:

So, good day to our audience from around the globe. Pardon the delay, we had a little technical glitch, and Jonathan is in dark mode right now, the camera's not working, we're working in the background to get that on. But, we'll get going on this exciting, Hinrich Foundation Trade Book Talk. I'm Alex Boome, I'm the Trade Education Program Director at the Foundation. And today, we're in discussion with Jonathan Saunders, author of Empires of Trade, The Ruthless Battle for Global Wealth and Power.

Our conversation will delve into this timely book that examines trade not as a neutral exchange, but as a persistent arena of strategic competition. Jonathan will connect the long arc of historical trade dynamics to today's global economic tensions.

And outline possibilities for future trade scenarios. He's happy to take your questions, so please type in the chat, and I'll come back to them later in the session. Jonathan's background spans mechanical engineering, architecture, law. Advisory for complex federal, cross-border, and mission-critical business matters. Jonathan, thank you for joining us today.

Jonathan Saunders:

Thank you, appreciate the opportunity.

Big Idea & Origin Story

Alex Boome:

Yeah, great. Let me start with the broadest question behind the book. Why did you feel now was the right moment to write a history of trade and power?

Jonathan Saunders:

Well, you know, I've been involved in cost-border contracting for some time, and I was noticing that people were not. Getting the whole global picture of what globalization was about. They weren't getting the understanding of the difference between. Just international trade and globalization, and there's a significant difference between them.

In that, you know, international trade is basically one company on one side, in one country, buying something from a company in another country. They ship it, they're done, and that's it. But globalization is a lot more involved than that. Globalization involves, technology, financing, Shipping, deregulation, corporate incentives, trade agreements, geopolitical optimism, and the pursuit of efficiency and profit.

And it was probably the most difficult part, or the most complicated part, was the pursuit of Efficiency and profit. They looked… what was forgotten about was redundancy and resiliency. And protecting their own environment. You know, it's like when and this has always been a mantra I've tried to teach the companies, that when two boxers touch gloves, and the referee says, protect yourself at all times, okay?

That is something that companies have failed to do. They have become singular in a lot of their stuff. Their economic integration, they thought would reduce war. They thought trade would moderate nationalism, global supply chains would create mutual dependence, and liberalized markets would spread prosperity. Well, it did for a while. And the upside looked compelling.

The gains were enormous. With high visibility. They had lower prices for customers. There were more products available. Rapid technology… technological access. Global availability of goods, and lower costs, lower layer costs, larger markets, and global sourcing flexibility.

But the downside, was that the system worked really well. But then it became stressed, through situations like COVID, Ukraine, the war in Ukraine, shipping disruptions, semiconductor shortages, energy shocks, and rising U.S.-China tensions. And then suddenly, governments and corporations realized, you know, that critical industries lacked domestic capability.

They had concentrated production and created strategic vulnerability. Their efficiency had replaced redundancy, which was important, which I'd like to talk about in contracts. But… The system worked really well, again, until… They got stressed. Under traditional trade systems, nations traded externally. But retain relatively independent internal economic foundations. But that isn't happening in globalization. Globalization changed that.

Production itself became internally fragmented. This meant countries increasingly dependent on foreign components, Foreign Energy, foreign technology, Foreign shipping, Foreign financing, foreign rare earths. Foreign Pharmaceuticals, Former semiconductors, and so on. The system became deeply interwoven. Instead of having this energy independence, it became very interwoven, so that they were reliant on each other.

So, what has happened is that the company… the world has become so interconnected, then. When you have a disruption like we have now, or have had been going on for a while now, is it really makes things more difficult. And that's, you know, that was one reason I brought it, is I just thought people need to know more about what's going on.

They're getting one-sided pictures from and this isn't bad, but, you know, you've got. People who are specialists in economics, and some in trade, and some this and that, and they're all giving their sign of it, but nobody's giving an overall comprehensive picture.

Historical Patterns of Dominance and Protectionism

Alex Boome:	Bringing it all together. And so you've really, this bringing global... globalization to the fore, and perspective for the reader. Now, that's where we are now, but you have a real, broad historic arc. You've taken the reader through from mercantilism and the empire to the technology and the economic rivalry. I just, you know, stepping back, looking across that sweep of history, what are the main patterns that you see that you see repeating?
Jonathan Saunders:	That's a good question. Well, you know international trade's always been competitive. And probably the big things were at least going back to mercantilism in the early years is probably control of trade routes. Okay, and then, a lot of the companies, would come in and actually take over a country. For example, the Dutch took over, I forget the country now, but they… it was… they had nutmeg. And they actually went in, and, I think it was an Indonesian country, they went in, and actually, literally, and I talk about this in the book, they went in and killed off all the males, took the women and children and shipped them off as slaves, and put their own people in there to take over, because the nutmeg was such a lucrative type of business. So, what has happened, you know, in looking back to the history, the most common things would be, trade routes, and controlling the product, whatever it was that they were trying to control. Whether it was, something like nutmeg, or cotton, or tea or some manufactured product. The idea was to control it. And gained dominance over it, which was probably the biggest thing. That occurred, and is trying to occur now, is dominance. Because if they can dominate, A market, or trade route. Then, you know, they have control, over the globalization of that.
Alex Boome:	Do we see this… so you're suggesting that from nutmeg to semiconductors, it's all the same thing?
Jonathan Saunders:	Pretty much, yeah. It's just a, you know, it's just… The product has changed, but the logic is still the same thing. It's control, it's dominance. It's about controlling and having the power to manipulate. Is really what it's about. And that's, you know, what's going on now.
Alex Boome:	You've touched on the… from the corporate side, historically. Where does in history, where do the, from the national point of view, or the country perspective, what do we see that's, sort of common, historically up until today? What are some of the themes there?
Jonathan Saunders:	Well, historically, probably the most common thing has been tariffs, okay? They go back thousands of years. They found out that they could use tariffs not only to control and protect their own industries that they had, which is one of the reasons they used it, but it also brought money into the government. And then they found out that they could use regulations of different sorts, such as controlling, you know, how much of a product could come in or how much of a product their own people could sell or ship out. You know, and of course, in modern times, it's gotten a lot more complicated with artificial intelligence and, communications with the internet. Where, you know, the governments are laying out, some very sophisticated and very strict. Rules when they feel like they need to gain control of the market. So, you know, Again, it's you know, before… back before, say the telephone, or Western Union, or whatever, the communication was different. And they didn't have the ability to reach across nations, or oceans, or continents, and tell somebody, hey. We're not gonna let you do that because of you're oversupplying the market. Or you're underpricing it, or you know, whatever their thought of the moment is, if you will.
Alex Boome:	You note, I guess in France there was a revolt, basically, because of the protection, as if I'm correct, and we see, sort of, on the other hand, in the U.S. now, a bit of a revolt from, sort of, openness or globalization. I could you talk to those, those points, maybe how they're similar or different? They're kind of both based on, you know, the impact of the market and government policy, kind of from different directions. Could you comment on that, please? Okay, would you mind restating that again? Yeah, so we were in France, there was the protectionism, and there was revolt, and in the U.S, there's probably the view is too much openness, and there's a bit of a revolt. Could you sort of talk about that, maybe the domestic issues of this globalization or global trade, tariffs and some of that, power, how it reflects back on the local population?
Jonathan Saunders:	Well, yeah, the… in the United States, for some reason, they seem to think that there's oversupply, that we're being taken advantage of, and, you know, and… I guess that's probably, like a lot of things, it's just sort of, you know, that's anybody's opinion. But the attempt to try to regulate industry, is it coming in and going out, and, and create take away from this openness that we've had in the United States, and try to restrict it. I don't want to get into politics on that, but I mean, I think that it's probably erroneous. The international trade itself, just, you know, forgetting the globalization and all the things like that. Just allowed people to have choices. It allowed people to buy at a price that they felt they could afford. You know, if they didn't like the price from this supplier from China that could buy this supplier from, say, Vietnam, or wherever they happen to be. Say, for example, like, coffee's a big, big item, okay? If they didn't like the coffee price from Brazil, they could bring the coffee price from somebody else. So, you know, that, I think, is a problem, because it's a limiting. And then, like you talked about France, now I'm not that familiar with their situation, but I think trying to control. The goods that come in, and the goods that go out, and the pricing, and so forth can have some benefits for the local. Yeah, businesses. But it can also be limiting. And, you know, I'm trying to wrap my head around is, you know, why somebody would want to limit their own businesses.
Alex Boome:	Hmm.
Jonathan Saunders:	By putting restraints on them. And in the United States, you know, it's kind of like, why are we… why are we withdrawing and putting all these outrageous tariffs on, on, other trading partners, you know, foreign… there's been none in the past. I mean, it's been outrageous in points in the past, and even back in the 20s when it was done here. I just my own opinion is that that's erroneous. I mean, I think small tariffs and other restrictions are necessary to help protect business. You know, but as far as leaving it open for trade, yeah, I mean, people can go on the internet and buy stuff online from China, or Vietnam, or Brazil, or France, or Italy, they can buy clothing, they can buy cars, you know, so it's kind of an odd situation, really.
Alex Boome:	Yeah, it is, and you've, you, you're talking about choice here, product choice, lower prices, opportunity. In the book, you touch on some of the, some of the job losses, but also you touch on the job creation, lifting so many people out of poverty. Would you just touch on that a little bit? Because there are winners and losers, and you go into that a bit. Could you share that with the audience, please?
Jonathan Saunders:	Sure, yeah, you know, the, the some industries, you know, they rise and they fall, and they rise and they fall not only on, you know, through international trade, but just in their own domestic locations. It could be steel, it could be concrete I mean, I ... not to digress here, but I remember when I had my engineering company, we were buying… trying to buy concrete in the 1980s, locally in the United States, and they just couldn't produce it fast enough. Because of all the construction. So we ended up buying it from China. You know, and there's nothing wrong with that, and some of our projects were government projects, and they just said, okay, go ahead, you know, in spite of their buy American thing. Yeah. Businesses grow, some expire because they just don't fit in anymore. They're antiquated processes, whatever they might be. And with the world doesn't stand still. It keeps progressing, okay? And as it progresses, you know, new developments occur. People come up with better innovations, and some of those innovations create more jobs. Some of them cause people to lose jobs because what they're doing is not suitable anymore.
Alex Boome:	Yep.
Jonathan Saunders:	You know, it's kind of a give and take, and a lot of people are worried about what the artificial intelligence is going to do, but, you know, that's a whole other story, but businesses fluctuate, okay? The guy can be really riding high on something. And, you know, during an economic boom, and then the whole situation changes, and all of a sudden, he's found out he's losing. Okay, and then somebody else down the street from him is smiling and grinning because their business has taken off.
Alex Boome:	Hmm.
Jonathan Saunders:	And that's just, you know, the world doesn't stand still, it moves, it fluctuates, it has its highs and its lows, and unfortunately, you know, people are involved in the world, and, you know, they unfortunately are the ones that suffer from these highs and lows, and, you know. That's just...

Supply Chain Vulnerabilities and Corporate Resilience

Alex Boome:	What I was gathering from this is that with globalization, with the media, we're able to see these changes, and also at a much larger scale. Right? So, what you're suggesting here is that the winners and losers, the ups and downs have happened all forever because of... through business, but now we're just on a different scale because we're in a more, you know, visible, globalized world. I want to, for our… some of our policy people on the call this morning, sort of look at some strategic things. So, you weave the supply chain and geo-economic strategy throughout the book. And we say, you know, today, words like supply chain disruption, offshoring, and nearshoring, they've moved from the specialized business conversations to the front page. And would like to ask, sort of beyond the headlines, where do you see the most significant vulnerabilities in today's global trade system?
Jonathan Saunders:	Lack of redundancy. Because contracts are and I've written a piece on this, contracts are… Like a snapshot in time.
Alex Boome:	Okay?
Jonathan Saunders:	They take, they capture, with the time of signing, it captures the elements and the assumptions that the contract has in it at that time, okay? So, but what happens is, you can sign a contract on Monday, And on Friday. It could all change. It could be regulation changes, there could be shipping route changes, there could be financing changes, there could be supplier changes. You know, you might have a supplier who says, well, wait a minute, I can't do this right now because one of my subcontractors has an issue. He can't get his stuff, or he can't get his labor together, or whatever, okay? But the thing is, they don't allow for redundancy. In other words, they don't have a situation where when they write a contract, and I can I explain this? Is that when a company writes a contract, they're assuming that everything in that contract, especially long-term contracts, are going to basically stay the same. You know, they're not allowing for fluctuations. I mean, there's some things in there, like force majeure and that sort of thing. But, it doesn't allow for situations where there's a change. And they can't… you figure out how to manage it. It's kind of like if you go into the hospital, say, and the electricity goes out. Five seconds later, backup power comes on, okay? So you're never really in the dark. What businesses need to do is start establishing redundancy in having, let's say, backup contracts, so they can say. Okay, you can't deliver. Because of these issues, whatever they are. So we're going to go to our redundant. Guy, and they call him on the phone and say, okay, you're at bat, start swinging.
Alex Boome:	Okay.
Jonathan Saunders	You know, so there's no real long lapse of time in there. You know, it could be days, maybe weeks, but not, you know, a long period of time. And that's one of the biggest problems that I see, is the lack of redundancy and resilience and not looking forward into. You know, possibilities. I think that's one of the things that business executives need to do, is be able to have foresight, and they need to be able to look at the history of business, which, as we put in our book. And say, let me take a look at this, let me take a look at that. Let's see how this is going. Let's see how that's going. What are the signs? What are the signs that something might be going wrong? And that's… that's probably the biggest. It's just the redundancy and the lack of foresight.

Technological Disruption and Great Power Rivalries

Alex Boome:	Thanks. The leads, kind of stepping from the... at the enterprise, the business level, and sort of stepping back for a moment, if we could spend a little time on, regional perspectives. So there's two interrelated issues, and this might come into the, well, very much work bring into the conversation the geo-economic strategy, but these two interrelated issues, the first is really the, you know, the elephant in the room, the U.S.-China rivalry. But I think, you know, that's fairly well covered. We can, you know, touch on that. But second is how that rivalry is reshaping the formal trade blocks, the trade agreements, the regional cooperation, or competition. Where do you see these groups, heading?
Jonathan Saunders:	Well, I think we're gonna see a lot more of the regional trade blocks and, and developing, and like, I think, I hope I'm turning things right, it's called Mercer in Latin America, which is Brazil, and some other companies, and, I noticed that several companies, several countries are trying to get into that. One of them is Canada. One of them is from Europe, I think it's France, but I forget which one, but I think we're gonna see more of that, because it's more self-protective. Then they can let people in that they want in exclude people they don't want in. They can create their own currencies, in some cases, like cryptocurrency, or, you know, type of electronic Finance, where it's something that they work with within their own realm, and they have. Say, a basic currency that is solid, that they feel they can tie that to. It may end up creating, you know, Trade blocks competing with each other.
Alex Boome:	Hmm.
Jonathan Saunders:	You know, but I think the aim right now for most countries is, like I said, protect themselves. And, you know, you're seeing it in Africa, for example, where they're forming and growing their own trade blocks, across South America, and there is some in Asia, in the Pacific Basin there as well. So, you know, I think that's worth going. And how they interwork with each other, that's gonna be something to be seen.
Alex Boome:	I think that interworking is if you could just drill down a little bit more, so some of the... I think the historic trade blocks have been quite, firm and fixed, and it seems that some of them that are, being developed now are a little bit more flexible. Could you touch on that a little bit?
Jonathan Saunders:	Well, I'm not sure what you quite mean by flexible, but if you mean they're more willing to allow Trade with outside the block. Yeah, I think they're doing that because they may see opportunity for that, to gain not necessarily an edge, but to bring something in maybe to their own communities, their own populations, their own commerces that will advantage them, and they're probably going to do it on a limited basis, just from the standpoint that. We're gonna kinda pick and choose.
Alex Boome:	Hmm.
Jonathan Saunders:	What's to their advantage, because they're trying to protect themselves and their own businesses.
Alex Boome:	That also kind of suggests your thoughts on redundancies, right? You know, they might be a member of this block or that agreement, but they also need to have some backup, I get it as things are changing, right? Do you. The U.S.-China rivalry, of course, is pretty big, and it features in your book, and has had quite a few changes. Are there any thoughts on that that you'd like to share? Maybe from the sort of historic perspective. Not just U.S.-China, but other great powers, and where do you see, maybe this is putting you on the spot, but where do you see this, heading for that U.S.-China rivalry and all of the challenges that the world's facing because of that.
Jonathan Saunders:	That's a good question. Well, let me go back If you remember, the United States, before it became the United States, was an English colony.
Alex Boome:	Hmm.
Jonathan Saunders:	And I think it was 1877 or 1878, after the colonies became the Americas and got their freedom from, great Britain. It was very shortly after that, a furniture manufacturer, and I don't remember the name of it, but it was in New England, sent some furniture to China. Now, we're talking about 1877s, to see if they could make it cheaper, and as well, good quality and cheaper, so, the United States' relationship with China goes back to the late 1700s, you know, right after America got its freedom from Great Britain, because Great Britain had really restricted American trade. Everything from the United States had to go to Great Britain before it could be sold anywhere else. So, yeah, it's a long-term it's been a very long contentuous relationship. Hmm. Sometimes it works well, sometimes it doesn't. It's kind of like a marriage, if you will. And that, you know, it has its good moments and its bad moments. There's squabbles, you know, there's heights. Not physical fights, but, you know, trade war fights, or, you know, squabbles. In that direction, and, and, you know, who will dominate is a good question. In the long run, it's really gonna boil down to, you know. Let me grab a note here. I made a note on that, if you'll give me a second here. But it's going to really boil down to. You know, who can control financial systems. Okay, who can control trade routes? Who can control production on extensive items, so I rare earth minerals or advanced on technology, and that's a big one, advanced technology, because it involves, you know. Everything from toys to cars, ships, and military weaponry, and so on. So, it's really going to boil down to who can outdo the other, and it may be one of those situations where in 1990 in 2025, or excuse me, 2026, The U.S. is up. 2027, China is up 2028 America's up 2029, they run ahead-to-head. You know, it's one of those situations where they're competitive, and, you know, you have just two different philosophical thoughts on how to do business. Yeah. And, you know, sometime the Chinese seem to be a little bit more creative, and I got kind of amused, if you will, at their road and, and, what do you call it, road and.
Alex Boome:	The Belt and Road Initiative?
Jonathan Saunders:	Road thing, yeah, because they're going into countries. You know, and saying, here, we'll help you develop your roads, your infrastructure, and all that, so you can advance your business. Of course, they're going to want stuff, something in return.
Alex Boome:	Yeah.
Jonathan Saunders:	I kept wondering, why didn't the United States think of that?
Alex Boome:	I mean.
Jonathan Saunders:	We've got all the capability to do that, and I just… there's things I don't understand, and sometimes I think that the American, I don't know about the government, excuse me about business, but I think the American government gets kind of out-thought sometimes, so…
Alex Boome:	Addition can be good. It can be good.
Jonathan Saunders:	Competition can be very good, you know.
Alex Boome:	You've got, you've touched on this actually early on in the call, but we've got this new vocabulary for trade that includes, and you've mentioned it, the technology, AI, blockchain, some others that I saw in your book, the digital sovereignty, the digital sanctions. You just touched on rare earth chips, and then we've got the splinternet and more. It's just hard to keep up with. You know, what's your ….the core thesis that you advance in the book regarding these new trade realities. And, you know, do you see them mainly as weaponizing or harmonizing trade?
Jonathan Saunders:	Well, I think it's gonna be some weaponizing. To get an upper hand, to try to dominate. But I think in the long run, it's gonna have to be harmonizing, because you can only fight somebody so long over something, and then you both start to lose. And the harmonization of trade works much better than the aggressive type of trade, you know, the making it a warfare type of thing. That, you know, that can only last so long, because, like now, we're seeing, you know, countries and companies will start looking elsewhere. They're saying, you know, we don't want… we don't need this, it's disruptive, it's unstable, we can't plan on it, there's no long-term stability involved in it, so we're gonna go elsewhere. And I think that's gonna be one of the… that would be one of the big things, is that the people are gonna say, I've had enough of this, I'm going somewhere else.
Alex Boome:	So that diversification redundancies will come into play.
Jonathan Saunders:	Yes.
Alex Boome:	Good. Another one on the AI and these emerging technologies. If we could, you know, sort of step back to the policy side a bit again, how do you see them reshaping or impacting trade governance?
Jonathan Saunders:	I don't know if I understand your question. You trade governance? Is that what you said?
Alex Boome:	Yeah, I said trade governance, yeah. Okay. Technologies, I mean, there's for example, AI, it's taking over a lot of the scenario planning and so on, looking at, you know, maximizing and optimizing what are your sources, your suppliers, your, the companies that are, you know, you're engaging with, and that can help a company, a country make those decisions a lot quicker. So either on the country level or on the corporate level, how do you see these technologies sort of reshaping that?
Jonathan Saunders:	Well, from a corporate standpoint, it can make a company very more a lot more efficient, okay. Without reducing, it’s. Yeah, I've crossed my train of thought, but you can make them more, they can get more efficient, because they can get a better updated knowledge of what's going on around the world and the markets that they're serving. Or in the markets that they're trying to get products out of, they can use it, it can give them knowledge on what's going on, what governments are thinking, kind of a little bit of industrial intelligence there, and trying to figure out, well, what are these guys thinking? They're doing something that looks a little odd, blah blah blah. On the other hand, for governments, okay, They can use it to set rules regulations supervise, if you will, the financial means that is used, especially if cryptocurrencies and digital finance grow. They're going to want to supervise that for a number of reasons. And the government has an interest in making sure and using AI to make sure that. There's generally, I think, a level playing field, at least in their own country, and then they can try and keep a level playing field as much as possible with companies that they trade with you know, some will abuse it, obviously. I mean, it's just gonna happen. But I think it's… I think that it is a for business and government and especially if they will get their heads together, the government and the business, and coordinate so that government knows, really, what businesses need, you know. I think there's a lot of time there's a disconnect between government and business in that what is really needed, because policymakers will make a policy or a ruling, and it really just complicates life for business. And they need there needs to be much more; especially with the use of AI, and because it opens so many doors and creates so many avenues where there's so much knowledge available, and I say knowledge, I mean not just, you know, book knowledge, but I mean just day-to-day happenings that can affect a company. And they just need to be able to get together and figure out You know, how they're going to work together on that, so that they both gain from it. Then, you know, the government gets what it needs. Out of it, and the businesses are able to grow and prosper and, you know, create a better environment in their home country. Oh, I think that's…
Alex Boome:	Okay, and from the host of new technologies, you mentioned blockchain, a number of is there anything that you want to elaborate on that? Because it kind of I think in the press, it sort of seemed to be something that came and went, but you've brought it up several times, of course, in the book, but also on today's call. Is there anything you'd like to add to that?
Jonathan Saunders:	Well, I think it's... I think that it's going to become, you know, you can do… you can design, and we've worked with some great news on this, on designing blockchain contracts which, expedite things. It's been, in particular, the expedite payment. And the thing about the, the, the blockchains, or financial new developing financial payment systems, or payment. Rails is that… They can allow quicker turnaround on capital, because the manufacturer manufactures stuff, and he sends out. You know, millions of dollars worth of stuff on Monday, okay? Well, he's got all this money tied up in it, and he's gotta wait until not only does the ship, or however it gets there, gets across the ocean, it gets to there, and gets delivered. But then he's gotta wait for the company on the other end to make payment, which, you know, depending on how it's done, if it goes through the swift bank system, it could take a long time, you know, so… but if you can set this up, where like with the blockchain, where when the delivery's made, payment's made. It's instantaneous, okay? Then that moves capital back to the company. Quicker, so we can turn around and reinvest it. And it's not sitting there, you know, it's not having to pay interest on loans, or you know, receivables, financing, waiting to buy more inventory because it doesn't have the immediate cash, all that sort of thing. It could be, if handled properly, it could be a significant boom for industry, I think.
Alex Boome:	Great, great, yeah. Well, yeah, trade finance is massive, so hopefully that'll help us all. We're, we're I wanted to look the, the companies, you mentioned this, some of your advice to companies on redundancy, but for companies that are today navigating this newly fragmented global market, what signals should they be watching for? You talked about some new, you know, new alignment between countries, the new technology. What should companies look for to get through all this?
Jonathan Saunders:	Well, I think the first thing they need to look for is they need to look at the governments or the jurisdictions that they're dealing with, because that can be the most disruptive, I think, from the standpoint that they can close shipping lanes, they can close ports, they can restrict stuff that goes in and out, they can put in regulations as far as, you know what can come in, or what it can look like, or and so on and so forth. I think that's the first place to look.
Alex Boome:	Hmm.
Jonathan Saunders:	Secondly is shipping lanes, because those are… can be significant choke points, and we've seen that, of course, with the Hormu Strait, but even with events like the Suez Canal, for example.
Alex Boome:	Hmm.
Jonathan Saunders:	It's… it got blocked up one time when a ship got turned sideways in it, and it took, I don't know how long it took to make it a straightened, it looked like a month to get that straightened out.
Alex Boome:	No.
Jonathan Saunders:	And that wasn't a war that wasn't… It was just human error. But the world had to almost they had to find different ways to get around that.
Alex Boome:	Yep.
Jonathan Saunders:	I think one of the big things people need to look at, or companies need to look at, is alternative shipping routes, alternatives, so that they have something right at their fingertip, they can say, okay, well, the Siskan Island is blocked up. Or it can only handle so much traffic, and we need to get this stuff here quicker, so we need to find alternate routes. I think that's one of the big things.
Alex Boome:	Back to redundancies, really.
Jonathan Saunders:	Yeah, it's redundancy, you know, that's just a couple of things. I've got a… I actually got a list here somewhere of things, but they need to be aware of. Well, we call it situational awareness, is what we call it. And that means that they need to be aware of what's going on around them. Yeah. As far as, the governments. As far as, you know, finance, and I'm not talking about blockchain and that stuff here, I mean, just the banks could change interest rates.
Alex Boome:	Hmm.
Jonathan Saunders:	Decide that we're not going to finance this particular type of, product. We're not gonna finance stuff coming from this country for whatever reasons. That may be, you know, they need to look carefully at each element, In their contract, and say. Okay, where are we exposed? And if we are... if we get exposed, how do we deal with it?

Four Future Scenarios for Global Trade

Alex Boome:	Very, prudent advice from, I guess, from your law background, right? Your legal background. Jonathan, in your last chapter of your book, The Future of Global Trade, you've outlined four possible scenarios. Would you run through those for us? I think that'll be fascinating to get your thoughts on after looking.
Jonathan Saunders:	Yeah, let me grab some notes real quick here, if you don't mind.
Alex Boome:	Yeah.
Jonathan Saunders:	To kind of refresh myself, but yeah, that's interesting. Greeted those, because I thought, you know the world's gonna end up in a different situation here, and we don't know, because, you know, we get leaders, and I'm not making any political comment here, but you get leaders with different thoughts on trade, on relationships with companies, or excuse me, with countries, and it can get difficult. But, in Scenario 1, we're looking at a new Cold War. The scenario imagines the world splitting into rival economic camps. Broadly, a U.S.-EU-aligned bloc. and a China-Russia aligned bloc with countries like India, Brazil, Indonesia, and South Africa trying to maneuver between them. In this world, supply chains are organized less around efficiency, and more around alliance, security, and strategic dependency. The manuscript decides the global free trade, giving way to trade by political alignment. With rare earths, semiconductors, energy, cyber capacity, and finance becoming instruments of the block power. Now, the pro of this is that this is already partially happening. Strategic sectors are increasingly being treated as national security assets, especially chips. AI, defense technology, data, Energy and critical minerals. The World Economic Forum's 2026 Supply Chain Outlook describes fragmentation and geopolitical volatility accelerating as trade barriers. Industry policy and conflicts fracture globalization into competing blocs anchored by the U.S, China, and EU. No. Scenario 2, Which is probably more where we're headed, is managed competition. And this is trade wars without collapse. This is the most realistic scenario, I think, because we're just too interdependent, even as it is, even in just regular international trade, there's still dependency there. But, I described a world where trade remains a battleground. But the system does not completely break. Tariffs? Sanctions, export controls, and strategic restrictions become normal tools, but governments preserve enough trade to avoid collapse certain sectors, such as AI, semiconductors, quantum computing, biotech, Cybersecurity, pharmaceuticals, defense, become guarded. Well, ordinary trade continues who are possible, okay? So the pro side of this is that this fits the world were actually seeing. Trade is not ending. It is not… it is being filtered. Governments are not saying, no trade. They're saying controlled trade. Security, excuse me, secure supply chains, trusted partners. French shoring, export controls, and industrial policy, the UNCTADS 2026 trade update. Yes, global trade is under pressure from slower growth, geopolitical fragmentation digital and green transitions, and tighter national regulations. That is almost exactly managed competition Okay? Never. 3 Let me get to my page here. Three is collapse of globalization. Okay, this is the darkest scenario. The manuscript decides trade wars spiraling into hyperprotectionism. Multilateral institutions are becoming irrelevant. Countries retreating into economic fortresses. Supply chains break and prices are rising. Investment collapsing and developing nations being hit especially hard. It also ties economic collapse to political extremism. Authoritarianism, migration pressure, and technological stagnation. No. The strong side of this is the warning… the historical warning is real. Smoot Harley, the Great Depression, wartime blockades, and sanctions. Regimes all show that, economic conflict can spiral. If major powers overuse tariffs sanctions, currency controls, and supply chain restrictions, the world could slide into a much harsher economic order. Okay. Nope. On the other side of that, full collapse is unlikely because too many companies, excuse me, too many powerful. Interests depend on trade continuing. Corporations, consumers, Governments, financial markets, and developing economies all have strong incentives to prevent total breakdown. Even the World Trade Organization reported that world merchandise trade grew strongly in 2025, partly because AI-related goods offset tariff pressure. Although trade is expected to slow in 2026, not if it's slowing or not, but it's having its issues. Now, Scenario 4. Globalization. I call that Globalization 2.0, which is a new global and age of trade. This is the optimistic scenario advising globalization emerging in a more decentralized, technologically advanced form, powered by AI-driven supply chains, blockchain, smart contracts. Decentralized finance, Automation, robotics, 3D printing, and localized production hubs. It is not a return to old globalization, but a technologically enhanced version. I know some of that contains a lot of highly sophisticated, technological, equipment issues, and what have you. Now, technology can create a new form of trade, which is… we're seeing that happen. AI, automation, digital finance, and decentralized production may make supply chains more flexible and less dependent on single choke points. Now, that supports your larger volume, excuse me, that is my note. Anyway, that supports, thinking about settlement rails, stablecoins, alternative payment systems, and capital velocity. Now, choke points are not only, just to digress a minute here, not only just physical choke points, such as shipping with, you know, choke points, like we have with Hormuz, or Malacca, or some of those places that could be formed. But choke points also include production capabilities, financing capabilities, regulation capabilities, and so on. Those can become choke points, and that's something that, management needs to look at is choke points. Technology does not eliminate power. It often concentrates it.
Alex Boome:	Hmm.
Jonathan Saunders:	AI chips, cloud infrastructure, data centers, energy supply, digital identity, payment rails, dnd blockchain regulation all become new control points. So, Globalization 2.0 may happen technologically. But politically, it will still be governed by managed competition. So my best guess is that I think Scenario 2 is the durable one. I think that it's the point where people are going to manage their competition. The world is not going to go back to old free trade globalization, obviously, but that model assumes stability, cheap transport, predictable legal frameworks, and relatively neutral supply chains. Those assumptions are breaking. So, but the world is not going to abandon trade completely. The costs are too high even hostile powers need markets. Jonathan, we're just at….
Alex Boome:	Just at time here.
Jonathan Saunders:	Totally.
Alex Boome:	Just, that's fine. The, I'm glad that we've got this managed competition to look forward to. That makes me feel better. The last thing, any one key takeaway that you most hope the audience will have after reading Empires of Trade?
Jonathan Saunders:	Yeah, I think the big takeaway…It's going to be that they live in a fluctuating world. That they need to be adaptable. That they need to have a sense of humor, if you will, about some of this.
Alex Boome:	Right.
Jonathan Saunders:	I'm mad, but, you know that. They need some way the public needs to be able to give some guidance. However, they do it through to businesses and to government. So that they're not the ones end up holding the short end of the stick.
Alex Boome:	Right.
Jonathan Saunders:	And that's basically, the gist is that, you know, It's a competitive world. All the way up and down the line, from jobs, schools, business, governments, Sports. That, you know, they need to face that and say, okay. How do we deal with this? Right. And that's, you know, it's about... that's what it's about. It's about competition.
Alex Boome:	Yep. And that reminds me, as you note in your prologue, that trade matters now more than ever. So with that, I'd like to thank our guests for joining us, and Jonathan for your great insight, and when we get your next book, we'll make sure we've got the video up and running, okay? Thanks, everyone.
Jonathan Saunders:	Yeah, my apologies, I don't have no idea what, you know, it's, it's, it's like a jinx, you know, the video I shot for you guys was perfect, and now, for some reason, this is just…
Alex Boome:	Well, you just gotta read the book to get that extra insight. Thank you so much, Jonathan. Thank you, everybody. Talk to you soon.
Jonathan Saunders:	I appreciate it. Bye now. Thank you.
Alex Boome:	Bye-bye.