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Illustration: Sarah Grillo/Axios

With leaders of the world's 2 largest economies signaling they have no intention of backing down from a drawn-out trade war, a rollback of the globalization model that has helped create record stock prices and company profits looks firmly in motion.

What's happening: President Trump's America First agenda is the biggest driver of this trend but far from the only one. Countries have been putting up new barriers to cross-border trade and investment since before Trump took office.

  • From January to August 2016, countries in the G20 alone introduced more than 350 trade regulation measures versus 100 to liberalize trade, and 10 times more measures restricting than easing foreign direct investment, according to Stéphane J.G. Girod, a professor at IMD business school in Switzerland.
  • The World Trade Organization last month slashed its global trade growth projection for 2019 to the lowest in 3 years, citing the impact of rising tensions and tariffs. It's the second straight year the organization has lowered expectations.

Why it matters: While many market strategists have been warning of the damage a reversal of globalization will do to asset prices, the market has yet to react meaningfully. That is a risk in itself, says Alan Ruskin, chief international strategist at Deutsche Bank.

  • "The longer markets prove resilient to tariffs, the more tariffs will become a more permanent feature of the international trade landscape – 'a new trade normal,'" Ruskin wrote in a note to clients.

The big picture: The ability of companies to conduct business globally has allowed firms to find new materials, reach new customers and outsource their largest cost — labor.

Its reversal is bad news for all parties involved, argue strategists at UBS, and includes a number of unexpected risks that could impact markets, such as reducing global demand for commodities like oil. That could knock as much as a percentage point off U.S. GDP because of America's new position as a major oil producer.

The bottom line: Vinay Pande, UBS' head of trading strategies, says a reversal of globalization's impact is worth "at least 20% in present value terms on the S&P 500."

  • "Globalization is up the escalator but de-globalization is down the elevator shaft."
  • "De-globalization is like a guillotine, in that it comes very fast."

Go deeper: The world can't afford a trade war right now

Go deeper

Updated 4 hours ago - Politics & Policy

Supreme Court backs religious groups on New York coronavirus restrictions

Photo: Saul Loeb/AFP via Getty Images

The U.S. Supreme Court ruled late Wednesday that restrictions previously imposed on New York places of worship by Gov. Andrew Cuomo (D) during the coronavirus pandemic violated the First Amendment.

Why it matters: The decision in a 5-4 vote heralds the first significant action by the new President Trump-appointed conservative Justice Amy Coney Barrett, who cast the deciding vote in favor of the Catholic Church and Orthodox Jewish synagogues.

USAID chief tests positive for coronavirus

An Air Force cargo jet delivers USAID supplies to Russia earlier this year. Photo: Mikhail Metzel/TASS via Getty Images

The acting administrator of the United States Agency for International Development informed senior staff Wednesday he has tested positive for coronavirus, two sources familiar with the call tell Axios.

Why it matters: John Barsa, who staffers say rarely wears a mask in their office, is the latest in a series of senior administration officials to contract the virus. His positive diagnosis comes amid broader turmoil at the agency following the election.

Bryan Walsh, author of Future
11 hours ago - Health

COVID-19 shows a bright future for vaccines

Illustration: Annelise Capossela/Axios

Promising results from COVID-19 vaccine trials offer hope not just that the pandemic could be ended sooner than expected, but that medicine itself may have a powerful new weapon.

Why it matters: Vaccines are, in the words of one expert, "the single most life-saving innovation ever," but progress had slowed in recent years. New gene-based technology that sped the arrival of the COVID vaccine will boost the overall field, and could even extend to mass killers like cancer.