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Global production scenarios: Actual unbundling, potential rebundling and geoeconomic rewiring across value chains

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  • Giammetti, Raffaele
  • Wirkierman, Ariel L.

Abstract

We analyze the cross-country distributional effects of global production reconfiguration by means of two multisectoral accounting exercises. First, we simulate counterfactuals that decouple input structures from final demand composition, showing that it is not trade integration per se that determines value-added outcomes, but the fit between production architectures and final demand geography. Second, we model three geoeconomic fragmentation scenarios – involving unilateral provocation and retaliatory decoupling – based on bloc-specific trade restrictions among US-led, China-led and Non-Aligned country blocs. Results reveal asymmetric impacts: large, globally embedded economies face significant losses, while gains concentrate in geoeconomically aligned or flexibly positioned economies. Sectoral outcomes vary with value-chain positioning. The paper provides a global multisectoral accounting perspective to analyses of supply chain disruptions, emphasizing that the same inter-country input trade interdependence that once brought efficiency gains may now act as a constraint in shaping resilience under trade realignment.

Suggested Citation

  • Giammetti, Raffaele & Wirkierman, Ariel L., 2025. "Global production scenarios: Actual unbundling, potential rebundling and geoeconomic rewiring across value chains," International Economics, Elsevier, vol. 183(C).
    • Handle: RePEc:eee:inteco:v:183:y:2025:i:c:s2110701725000393
    DOI: 10.1016/j.inteco.2025.100616
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    Keywords

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    JEL classification:

    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor

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