Sanctions, supply chains, and the end of hyper-globalization?

In a quiet corner of China’s Guangdong Province, rows of humming sewing machines once symbolized the unrelenting rhythm of global commerce. This area, nicknamed the “SHEIN Village,” served as a production hub for the Chinese fast-fashion giant SHEIN, an enterprise that thrived on low-cost, high-speed apparel production shipped directly to consumers around the world. Today, that hum has dimmed. Work has dried up. The factories are idle. And the villagers say, simply, “There is no work.”

The reason? Sanctions and tariffs.The Trump administration’s imposition of steep tariffs, rising as high as 34% on Chinese imports, along with the elimination of tax-exempt status for low-value packages, have upended the business model that fueled SHEIN’s meteoric rise. But this is not just a story about one company or one village. It is a glimpse into a much larger reckoning: the fragility of the global supply chain model that has defined the past three decades of economic growth.

Sanctions today are no longer mere political gestures. They have become structural disruptors, forcing businesses to confront the uncomfortable truth that low labor costs and favorable trade terms cannot be taken for granted. Once a company realizes that a shift in political winds can collapse an entire distribution strategy, the calculus changes. The priority is no longer simply to optimize cost, it is to manage risk, to build resilience.

This reorientation of thinking began in earnest during the COVID-19 pandemic, when the vulnerabilities of the global just-in-time system were laid bare. As ports clogged, borders closed, and shipments stalled, companies learned the hard way that efficiency without redundancy was a gamble. Fragility, not flexibility, had become the defining feature of globalization.

In the aftermath, a new logic has begun to take hold. Companies across sectors are rethinking their supply chains not only to reduce exposure to geopolitical risk, but also to bring production closer to their end markets. For some, this means re-shoring, bringing manufacturing back to the home country, particularly in strategic sectors like semiconductors, pharmaceuticals, and energy. For others, the path forward is near-shoring: shifting production to neighboring countries or politically aligned partners. American firms are increasingly looking to Mexico. Japanese companies are diversifying into Southeast Asia or even back into regional hubs within Japan. The once-theoretical “China Plus One” strategy is now an operating principle for many multinational businesses.

What we are witnessing is not the end of globalization, but the end of hyper-globalization. The era of sprawling, ultra-lean, globally dispersed supply chains optimized purely for cost is giving way to a more fragmented and regionalized model. Trade continues, but it is becoming increasingly concentrated within blocs; North America, Europe, Asia-Pacific, each striving for greater self-sufficiency.

In this evolving landscape, there will inevitably be winners and losers. Countries like Vietnam, Mexico, and India are well positioned to capture redirected investment, offering competitive labor costs with fewer geopolitical strings attached. On the other hand, regions in China that built their prosperity on high-volume, low-margin export models, such as the SHEIN Village now find themselves exposed. Unless they move up the value chain, pivot to domestic markets, or radically adapt, many may struggle to survive.

Not all companies are agile enough to relocate production overnight. While larger players may invest in new facilities abroad, many small and medium-sized factories are left behind, trapped in an ecosystem built on assumptions that no longer hold. The dislocation is real, and the human toll is visible in the empty streets and silent sewing floors.

Still, perhaps there is something redemptive in this shift. The low-cost, high-speed model has long depended on questionable labor practices, unsustainable production methods, and a race-to-the-bottom pricing ethos. A world less obsessed with marginal cost savings might also be a world more attuned to ethics, sustainability, and long-term value.

The disruption of SHEIN’s village is not an isolated incident, it is emblematic of a structural transformation in global trade. As the forces of nationalism, climate urgency, and technological change converge, companies are being asked to prioritize not just price, but place, purpose, and preparedness. Resilience is becoming the new competitive advantage.

The age of hyper-globalization may be behind us. What lies ahead will be slower, perhaps more expensive but potentially more stable, more just, and more aligned with the needs of both people and planet. The question is no longer whether change is coming. It is already here. The only real question is: how fast can we adapt?