The mercantilist model (China until 2014, Germany and the United States today) is incompatible with the regionalisation of value chains

The regionalisation of value chains is leading production to take place on a regional basis, close to the final buyers of goods. It stems from rising production costs in emerging countries and growing demand for local content. The mercantilist model is based on the idea that a country’s growth stems from its ability to sell more and more to the rest of the world - including distant regions. This model was pursued by China; today, it is being pursued by Germany and is what Donald Trump wants for the United States. But it is important to understand that the mercantilist model is incompatible with the return to regional value chains, which is leading products to be made only for buyers close to the location of their production. Germany is going to run into trouble and Trump is not going to be able to grow the United States along mercantilist lines.