The term describes the return of state meddling in the cross-border operations of multinational enterprises, a phenomenon with deep historical roots. Britain and the Netherlands were bankrolled by their East India companies, and provided military and diplomatic support in return. Germany's Krupp and Japan's Mitsubishi aided industrialisation while their governments secured mines and markets abroad. American interventions helped oil firms secure foreign resources. For a spell, starting in the 1980s, governments stepped back and multinationals spread, unconstrained, across the globe. Today, however, the era of unconstrained globalisation is fading.
Western multinationals make about $23trn in annual sales, $2.4trn in profit and employ millions across the globe. America's global leviathans alone account for more than a fifth of domestic private-sector employment, two-fifths of physical investment and three-quarters of profits.
Tariffs, subsidies and sanctions have steered capital away from places including China and Russia, and towards home markets. In 2016 American multinationals did 44% of their capital spending domestically; by early 2026 the share was 69%. Foreign sales have fallen in real terms, while those made at home have risen. The retreat is more striking in industries that governments regard as "strategic", such as software, drugs and carmaking.
Jamieson Greer, Donald Trump's trade representative, has said that the heyday of globalisation is not coming back. The Trump administration has urged American oil bosses to return to Caracas or face retribution, pressed defence firms to stop buying back shares, demanded that tech companies selling advanced processors to China share a cut with the government, and taken stakes in a clutch of mining companies and a struggling chipmaker. Its National Security Strategy, published in December 2025, says it will continue to do so.
There is evidence that multinationals are losing profitability compared with firms that operate only domestically. An analysis of the return on invested capital of Western non-financial firms with sales over $10bn for 2023 and 2024 found that in seven out of nine industries, multinationals' returns trailed those of domestic rivals. In many of these areas, the gap has widened since 2018-19.
I have never understood this liking for war. It panders to instincts already catered for within the scope of any respectable domestic establishment.