From Free Trade to Protectionism: How Can Firms Build Resilient Global Value Chains Amid Growing Uncertainties?

Abstract

This thesis investigates the global shift from trade liberalization to protectionism and its implications for global value chains (GVCs). It maintains a particular focus on the evolving trade policies of the United States under the first and second Trump administrations. The analysis employs a mixed-methods approach, combining institutional scenario modeling, macroeconomic data, and corporate case studies. Findings indicate that while protectionism aims to bolster domestic industries, it often results in higher costs, reduced investment, and unintended consequences such as accelerated technological self-sufficiency in rival economies. Firms are responding with adaptive strategies, including friendshoring, dual sourcing, and the emerging “USA +2” model, which balances domestic production with diversified international sourcing. Institutional forecasts suggest that GVCs are not collapsing but evolving toward more resilient, politically filtered structures. The thesis concludes that resilience in GVCs is best achieved through a hybrid strategy that integrates at least two of these four factors: diversification, domestic capacity, flexible production, and strategic stockpiling, enabling firms to navigate an increasingly fragmented and uncertain global trade environment.