Economic Nationalism and the Changing Nature of Global Trade
- International Academy
- Dec 1, 2025
- 14 min read
Author: Lina Kareem – Affiliation: Independent Researcher
Abstract
Economic nationalism has re-emerged as a powerful force reshaping global trade in the twenty-first century. Trade wars, reshoring policies, industrial subsidies, and strategic export controls have signaled a shift away from hyper-globalization toward a more fragmented and politically contested global economy. This article examines how economic nationalism is transforming trade patterns, production networks, and institutional arrangements at both national and international levels. Drawing on Bourdieu’s concept of capital, world-systems theory, and institutional isomorphism, the paper interprets economic nationalism as a struggle over economic, political, and symbolic capital within a hierarchical world system. The study employs a qualitative, theory-informed approach based on document analysis of recent policy initiatives, international reports, and secondary academic literature. The analysis shows that economic nationalism does not simply mean protectionism; it reflects a complex reconfiguration of trade in which states protect strategic sectors, build resilient supply chains, and attempt to reposition themselves in the global hierarchy. The findings indicate that: (1) global trade is shifting from efficiency-only logics toward resilience and security; (2) states increasingly use industrial policy and trade measures to accumulate different forms of capital; (3) regional blocs and “friend-shoring” arrangements are gaining importance; and (4) institutions and firms are pressured to mimic nationalist policy styles to remain legitimate. The article concludes that economic nationalism is likely to persist, but its long-term impact on development and global inequality will depend on whether countries can balance national interests with inclusive, cooperative trade frameworks.
1. Introduction
For several decades after the end of the Cold War, global trade was dominated by the idea that markets should be as open as possible and that production should flow to wherever it was cheapest and most efficient. This era of “hyper-globalization” was supported by trade liberalization, regional integration, and the expansion of complex global value chains. However, in the last decade—and especially in recent years—economic nationalism has become a central feature of international economic relations. Governments have increasingly used tariffs, sanctions, industrial subsidies, export controls, and “buy national” policies to protect strategic industries and to reduce dependence on foreign suppliers.
Economic nationalism is not a new concept. Historically, it has emerged in periods of crisis, conflict, or rapid change, when states perceive external threats to their economic sovereignty or domestic social contracts. What feels new today is the scale and coordination of nationalist economic policies across both advanced and emerging economies. Major trading powers are simultaneously revising their trade strategies, focusing on resilience, security, and geopolitical competition, rather than assuming that free trade automatically benefits all.
This shift has significant implications for the structure of global trade. Patterns of specialization, production, and investment are being reshaped as firms reconsider where to locate factories, how to design supply chains, and which markets to serve. At the same time, international institutions and trade rules face increased pressure as states reassert their control over cross-border flows of goods, technology, and capital.
This article aims to explain how economic nationalism is changing the nature of global trade and what this might mean for the future of globalization. The central research questions are:
How does economic nationalism manifest in contemporary trade policies and practices?
How is it reshaping global and regional trade patterns?
How can we interpret these changes using Bourdieu’s capital theory, world-systems theory, and institutional isomorphism?
To answer these questions, the article combines insights from political economy and sociology with recent empirical evidence on trade, industrial policy, and supply chain reconfiguration. The goal is to provide a structured, academically oriented analysis in clear and accessible language suitable for a broad readership.
2. Background and Theoretical Framework
2.1 Economic Nationalism in Context
Economic nationalism can be understood as a set of ideas and policy practices that prioritize national control over economic flows and production. It emphasizes domestic industry, employment, and sovereignty, sometimes at the expense of international cooperation or market openness. Recent expressions of economic nationalism include the use of tariffs in trade disputes, subsidy programs for local manufacturing, reshoring incentives, and restrictions on foreign ownership in strategic sectors.
The resurgence of economic nationalism is linked to several factors: the global financial crisis, rising inequality, discontent with trade agreements, technological rivalry, pandemic-related supply chain disruptions, and geopolitical tensions. Instead of simply rejecting globalization, many states are attempting to redesign it in ways that better serve perceived national interests.
To understand these developments, this article uses three theoretical lenses: Bourdieu’s concept of capital, world-systems theory, and institutional isomorphism. Together, they offer a multi-layered framework that connects state strategies, global hierarchies, and organizational behavior.
2.2 Bourdieu’s Forms of Capital and Economic Nationalism
Pierre Bourdieu’s theory identifies several forms of capital: economic, social, cultural, and symbolic. Economic capital refers to financial and material resources; social capital to networks and relations; cultural capital to knowledge, skills, and education; and symbolic capital to recognized prestige and legitimacy.
In the context of global trade, states and firms struggle to accumulate and convert these different forms of capital. Economic nationalism can be interpreted as a strategy by which states try to:
Protect and expand economic capital (jobs, output, tax base) by favoring domestic production and limiting foreign competition in key sectors.
Build social capital through alliances with “trusted” trading partners and regional blocs, often framed as “friend-shoring” or “near-shoring.”
Strengthen cultural capital by promoting national innovation systems, education, and technological capabilities.
Enhance symbolic capital by asserting economic sovereignty and projecting an image of strength, self-reliance, and leadership in strategic technologies.
From a Bourdieusian perspective, economic nationalism is not only about material gains but also about symbolic struggles. States seek recognition as technologically advanced, resilient, and sovereign actors in the global economic field.
2.3 World-Systems Theory: Core, Semi-Periphery, and Periphery
World-systems theory views the global economy as a hierarchical system divided into core, semi-periphery, and periphery. Core countries have advanced technologies, strong institutions, and control over high-value segments of production; peripheral countries depend on exporting raw materials or low-value goods; semi-peripheral countries occupy an intermediate position.
Economic nationalism interacts with this structure in several ways:
Core states use industrial policy, technology controls, and trade measures to preserve their dominance in strategic sectors (such as advanced manufacturing or digital technologies).
Semi-peripheral states employ selective economic nationalism to climb the value chain, for example by encouraging local production or requiring technology transfer.
Peripheral states face the challenge of maintaining access to markets and investment while attempting to move beyond dependence on commodity exports.
World-systems theory helps explain why economic nationalism may deepen global inequalities if powerful states reinforce their position while weaker ones struggle to respond. Yet it also highlights the potential for semi-peripheral states to use nationalist strategies to renegotiate their role.
2.4 Institutional Isomorphism and Policy Diffusion
Institutional isomorphism describes how organizations—and by extension, states—tend to become more similar over time due to three pressures: coercive, mimetic, and normative. In the context of economic nationalism:
Coercive isomorphism occurs when powerful states use trade rules, sanctions, or conditionalities that push other countries to adopt similar policies.
Mimetic isomorphism means that governments facing uncertainty may copy the nationalist industrial strategies of perceived leaders, fearing that they will otherwise be left behind.
Normative isomorphism emerges when professional communities, economists, or policy experts diffuse new ideas about “strategic autonomy,” “industrial resilience,” or “national security,” making economic nationalism seem legitimate and necessary.
As major economies adopt state-led industrial strategies and national security-motivated trade controls, other states and firms may feel compelled to imitate these policies, reinforcing the global spread of economic nationalism.
3. Method
3.1 Research Design
This article adopts a qualitative, conceptual research design that combines theoretical interpretation with document analysis. Rather than testing a specific hypothesis using quantitative data, the study aims to develop an integrated understanding of how economic nationalism is reshaping global trade.
3.2 Data Sources
The analysis relies on three main types of sources:
Academic literature on economic nationalism, trade policy, deglobalization, and global value chains. Particular weight is given to books and peer-reviewed articles published in the last five years to capture recent debates.
Policy documents and reports such as industrial strategies, trade policy reviews, and international economic assessments that discuss reshoring, supply chain resilience, and strategic sectors.
Secondary analyses in reputable economic and policy publications that interpret trade trends, supply chain shifts, and the geopolitical context of trade conflicts.
These sources provide rich qualitative material to understand the motivations, narratives, and practical effects of economic nationalism.
3.3 Analytical Strategy
The analysis proceeds in three steps:
Mapping contemporary expressions of economic nationalism. The study identifies recurring themes such as reshoring, strategic autonomy, export controls, and “buy national” regulations.
Interpreting these patterns through the theoretical lenses. Economic nationalism is examined as a struggle over capital (Bourdieu), a reconfiguration of positions in the world system, and a process of institutional isomorphism.
Synthesizing implications for global trade. The study assesses how these developments may alter trade flows, production networks, and development prospects.
3.4 Limitations
The approach is interpretive and does not provide statistical tests or country-specific case studies. It also focuses mainly on goods trade and major economies, meaning that some local variations or sectoral details are not fully explored. Nevertheless, the qualitative design is appropriate for capturing broad structural changes and theoretical implications.
4. Analysis
4.1 From Hyper-Globalization to Strategic Trade
During the 1990s and early 2000s, trade policy was largely framed around liberalization, integration, and the reduction of tariffs and non-tariff barriers. Firms extended supply chains across borders to minimize costs, and international institutions promoted the idea that global trade openness would support growth and development.
In recent years, this consensus has eroded. Trade disputes, strategic competition in high-tech sectors, and concerns about over-dependence on single suppliers have encouraged states to rethink their approach. Economic nationalism has become visible in several ways:
Tariffs and retaliatory measures in trade disputes, justified as corrective tools to protect domestic industries or respond to perceived unfair practices.
Industrial support for strategic sectors, including subsidies, tax incentives, and public investment in areas such as semiconductors, green technologies, and critical minerals.
Supply chain resilience policies, encouraging companies to diversify suppliers, re-locate production closer to home, or maintain buffer stocks of essential inputs.
Export controls and investment screening, especially for technologies considered sensitive for national security or strategic competitiveness.
These measures are often defended not as a rejection of trade, but as an attempt to shape it. The aim is to preserve national autonomy in key sectors, reduce vulnerability to external shocks, and align trade patterns with national development goals.
4.2 Economic Nationalism as a Struggle over Capital
Using Bourdieu’s framework, economic nationalism can be read as a struggle for different forms of capital within an increasingly contested global economic field.
Economic Capital: States seek to secure high-value segments of production—such as advanced manufacturing, digital platforms, or green technologies—because they generate jobs, profits, and fiscal revenues. Trade and industrial policies are designed to anchor these activities domestically. Reshoring incentives, for example, attempt to bring back production that had previously moved abroad in search of cheap labor or lower environmental standards.
Social Capital: Building networks of reliable partners becomes a priority. Instead of purely global sourcing strategies, firms and governments emphasize regional and “friendly” trade relations. This social capital is built through trade agreements, security partnerships, and long-term supply contracts with trusted suppliers.
Cultural Capital: Knowledge, skills, and technological capabilities are central. States invest in research, education, and innovation to develop domestic expertise in strategic areas. By promoting local technological ecosystems, they hope to reduce dependence on imported knowledge and to export their own standards.
Symbolic Capital: Economic nationalism is often wrapped in powerful narratives about national pride, sovereignty, and resilience. Governments gain symbolic capital by presenting themselves as protectors of workers, defenders of strategic autonomy, or champions of national innovation. This symbolic dimension helps justify interventions that might otherwise contradict earlier commitments to free trade.
Through this lens, economic nationalism is not a purely defensive reaction; it becomes a proactive attempt to reconfigure the distribution and conversion of capital within the global economic field.
4.3 Reconfiguring the World System
World-systems theory highlights that global trade is structured by enduring power asymmetries. Economic nationalism both reflects and reshapes these hierarchies.
Core economies use nationalist instruments to maintain control over high-technology industries and critical infrastructures. They seek to lock in their advantages through investment in innovation, control over intellectual property, and selective export controls that restrict access to advanced technologies.
Semi-peripheral economies attempt to move closer to the core by developing domestic capacities, upgrading industrial structures, and diversifying away from low-value assembly roles. Economic nationalism may support these ambitions, for example through local content rules, strategic trade agreements, and incentives for domestic manufacturing.
Peripheral economies risk becoming further marginalized if they are excluded from emerging regional blocs or if new trade barriers restrict their market access. At the same time, they may benefit from efforts by larger economies to diversify supply chains by investing in new locations.
Overall, economic nationalism intensifies competition over positions in the world system. Instead of a single integrated global market, the emerging picture is one of overlapping regional networks and strategic alliances, each centered on key economic and political powers.
4.4 Institutional Isomorphism and the Spread of Nationalist Policies
As leading economies embrace economic nationalism, other states and institutions feel compelled to follow. Institutional isomorphism helps explain this diffusion.
Coercive pressures arise when large markets condition access on compliance with their rules. For example, partner countries may need to implement similar export controls, product standards, or investment screening mechanisms if they want to remain integrated into key value chains.
Mimetic pressures emerge in situations of uncertainty. Governments facing social or economic challenges may imitate high-profile policies adopted elsewhere—such as national strategies for strategic sectors—because they appear to offer a credible response to voters and business communities.
Normative pressures are transmitted through international organizations, expert networks, and professional communities. Policy language around “resilience,” “strategic autonomy,” or “critical infrastructure” spreads rapidly, making economic nationalism seem not only legitimate but also technically necessary.
The result is a convergence of industrial and trade policy styles, even if each country adapts them to its own context. Large firms and global value chains must adjust to this changing policy environment, often by designing more flexible and politically aware global strategies.
4.5 Implications for Global Value Chains and Trade Patterns
Economic nationalism is altering how firms organize production and trade. Key trends include:
Shorter and more diversified supply chains. Companies are reconsidering highly concentrated sourcing strategies. Instead of relying on a single low-cost location, they diversify suppliers across multiple countries or regions, even if this increases costs.
Regionalization of trade. Trade flows become more concentrated within regional blocs, as geographical proximity and political alignment gain importance. Preferential trade agreements and shared regulatory standards reinforce this pattern.
Dual markets and technology spheres. Firms may need to adapt products to different regulatory and technological environments, such as distinct standards for digital infrastructure, data governance, or environmental requirements. This can fragment global markets into separate “systems.”
Increased role of the state in corporate decision-making. Governments influence investment and trade decisions via subsidies, screening, and strategic guidance. Firms must navigate an environment where political risk and policy shifts matter as much as cost considerations.
These changes suggest that global trade will not disappear but will become more complex, politicized, and conditional on national priorities.
5. Findings
Based on the theoretical and qualitative analysis, four main findings emerge about economic nationalism and the changing nature of global trade.
5.1 From Efficiency to Resilience and Security
First, the dominant logic of global trade is shifting from maximum efficiency toward resilience and security. During the era of hyper-globalization, the primary objective was to minimize costs through outsourcing and just-in-time production. Economic nationalism reintroduces the state as a key actor, emphasizing the need to protect strategic sectors and to ensure continuity of supply.
This does not mean that efficiency no longer matters, but it is increasingly balanced against other objectives. Firms accept higher costs in exchange for more secure and politically acceptable supply chains. Governments prioritize long-term national security and social stability over short-term cost savings.
5.2 Economic Nationalism as Capital Accumulation Strategy
Second, economic nationalism functions as a strategy for accumulating and converting different forms of capital. States use trade and industrial policy to:
Secure economic capital through domestic production and innovation.
Build social capital via alliances with trusted partners and regional blocs.
Develop cultural capital through education, research, and technology.
Enhance symbolic capital by projecting sovereignty, resilience, and leadership.
These forms of capital reinforce each other. For example, success in high-technology industries strengthens both economic and symbolic capital, while partnerships with like-minded countries build social capital that supports resilient trade arrangements.
5.3 Re-Stratification of the World System
Third, economic nationalism contributes to a re-stratification of the world system. Core economies use nationalist tools to safeguard their technological and financial advantages, while semi-peripheral states combine openness with selective protection to move up the value chain. Peripheral countries face the dual challenge of avoiding marginalization while navigating between competing blocs.
If economic nationalism is dominated by large powers, inequalities may deepen. However, if semi-peripheral countries successfully use industrial policies to diversify and upgrade their economies, a more balanced distribution of capabilities could emerge. The direction is not predetermined; it depends on policy choices, institutional quality, and the ability to integrate into new trade networks.
5.4 Institutional Convergence around Nationalist Policy Styles
Fourth, economic nationalism is becoming normalized through institutional isomorphism. Once a few influential states adopt strong industrial and trade strategies, others feel pressure to do the same. Over time, this leads to a convergence around policy styles that combine market mechanisms with assertive state intervention.
This convergence makes the global trade regime more complex. While there is still a formal commitment to open trade in many agreements, in practice the landscape is shaped by industrial subsidies, security-motivated restrictions, and differentiated regulations. Firms and smaller economies must navigate this environment carefully to remain competitive and integrated.
6. Conclusion
Economic nationalism is reshaping the global trade landscape in profound ways. Rather than signaling the end of globalization, it marks a transformation in how cross-border flows of goods, capital, technology, and knowledge are organized and governed. The shift from efficiency-only logics to a more multifaceted focus on resilience, security, and strategic autonomy is likely to define trade debates for years to come.
Using Bourdieu’s concept of capital, this article has shown that economic nationalism can be understood as a strategy by which states seek to secure and convert economic, social, cultural, and symbolic capital in a competitive global field. World-systems theory highlights how these strategies contribute to a reconfiguration of the global hierarchy—one that may either entrench inequalities or offer new opportunities for upward mobility, depending on how policies are designed and coordinated. Institutional isomorphism explains why economic nationalism is spreading across diverse contexts, as governments, firms, and international organizations converge around new norms of “strategic” trade and industrial policy.
The future of global trade will likely be characterized by:
More regionalized and politically shaped value chains.
Stronger state involvement in technology, industry, and infrastructure.
Continued competition over standards, rules, and alliances.
Ongoing tension between the desire for national control and the need for international cooperation.
For policymakers, the challenge is to harness economic nationalism in ways that support inclusive development rather than zero-sum rivalries. This requires balancing national interests with credible commitments to fair and predictable trade, investing in domestic capabilities without closing borders, and cooperating with other states on issues such as climate change, health, and financial stability.
For firms and workers, the new era of economic nationalism brings both risks and opportunities. Production models must adapt to changing trade rules and political expectations. Skills in technology, risk management, and international negotiation become increasingly important. If managed responsibly, the reshaping of global trade could lead to more resilient economies and societies. If driven by narrow competition and exclusion, it could deepen divisions and weaken the cooperative foundations of the international system.
In sum, economic nationalism is now a central feature of the world economy. Understanding its dynamics, motivations, and consequences is essential for anyone concerned with the evolving nature of global trade and development.
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