The British energy giant BP, the biggest foreign investor in Russia, is taking a $25 billion write-down and losing a third of its oil and gas production after divesting its share in the Russian oil company Rosneft. Right now, more disruptions of the global economy look likely as Shanghai and other parts of China lock down yet again to control the virus.īut the losses triggered by the war in Ukraine-and the speed at which they’ve been incurred-are unprecedented.
The business lockdowns and travel restrictions triggered by the COVID-19 pandemic left companies around the world scrambling to find reliable suppliers. President Donald Trump had already caused some companies to rediscover geopolitical risk and reconsider their exposure in China. The U.S.-China trade war launched by former U.S. Russia’s brutal invasion of Ukraine five weeks ago, and the punishing Western economic sanctions that have followed, did not on its own smash this complacency. Efficiency and seamless trade were top of mind for the world’s government and corporate decision-makers. World leaders made the annual trek to Davos, Switzerland, for the World Economic Forum to discuss the future of a global economy that was highly integrated and seemed to be getting more so each year. For decades, Berlin encouraged German companies to look the other way at Russia’s increasingly aggressive actions in Chechnya, Georgia, Ukraine, and elsewhere Germany is now Russia’s largest trading partner after China.
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So was the conclusion of the North American Free Trade Agreement with Mexico and Canada, which was driven largely by corporations seeking lower wage costs. The U.S.-Japan trade disputes of the early 1990s, which were mostly about Japan’s reluctance to buy more U.S.-made cars, beef, rice, and semiconductors, were a top priority for U.S. In the three decades since the end of the Cold War, the world was mostly stable enough to allow leaders to concentrate on pursuing and preserving economic opportunities-not only for pork producers but for all kinds of companies, small and large. Why This Global Economic Crisis Is Different
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