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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

Rohingya refugees sue Facebook over Myanmar hate speech

Internally displaced Rohingya peoples at a market area in the Baw Du Pha IDP Camp in Sittwe in Myanmar's western Rakhine state. Photo: STR/AFP via Getty Images

Rohingya refugees accused Facebook in a $150 million lawsuit filed Monday of amplifying hate speech against the persecuted minority Muslims in Myanmar via algorithms and failing to take down inflammatory posts.

Why it matters: Thousands of Rohingya Muslims have been killed in Myanmar in what the United Nations deemed a genocidal campaign. Tens of thousands of others have been displaced, notably following a massacre by Myanmar's military in 2017.

Former D.C. Guard alleges Army generals lied about Jan. 6 response

Members of the National Guard and Capitol police keep a small group of pro-Trump demonstrators away from the Capitol following the insurrection on Jan. 6. Photo: Spencer Platt/Getty Images

A former D.C. National Guard official has alleged that two Army generals "lied" to Congress in their testimony on the U.S. Capitol riot, Politico first reported Monday.

The big picture: Col. Earl Matthews, who was serving on Jan. 6, alleges in a memo that the official version on the military response is "worthy of the best Stalinist or North Korea propagandist" and that the Pentagon inspector general's November report on it features "myriad inaccuracies, false or misleading statements, or examples of faulty analysis."

Toyota to build $1.3 billion U.S. battery plant in North Carolina

The all-electric Toyota bZ4X, the company's first battery-electric vehicle, at the Los Angeles Auto Show in Los Angeles, California on Nov. 17. Photo: Frederic J. Brown/AFP via Getty Images

Toyota announced Monday it's investing $1.3 billion to construct an electric vehicle battery "megasite" near Greensboro, North Carolina, set to open in 2025.

Why it matters: The Greensboro-Randolph Megasite will employ 1,750 people and have four production lines, each capable of delivering enough lithium-ion batteries for 200,000 vehicles when it opens, per a Toyota statement.