‘Rise of the Regions’ - a scenario in which countries respond to global trade tensions by retreating into localised production
Later today, Donald Trump is preparing to unveil sweeping tariffs, that analysts fear could push up prices and trigger a trade war. Dr Arman Mazhikeyev, a researcher in international trade, barriers to trade, and regional trade agreements, explains what the economic implications could be for these actions.
“The introduction of sweeping tariffs on imports into America aligns closely with our research examining the 'Rise of the Regions' - a scenario in which countries respond to global trade tensions by retreating into localized production, regional trade blocs, and more self-reliant industrial strategies.
“The study showed that a trade war can accelerate regionalisation of supply chains by approximately 5-6% annually, compelling companies on both sides of the Atlantic to reconsider and potentially localise their production networks.
“Considering the 25% tariff on car imports, for European and Chinese automakers exporting to the US, this tariff represents a substantial disruption, with cost increases potentially reaching double-digit percentages, significantly reducing competitiveness in the American market.
“Businesses may respond by shifting production closer to the US or increasing investments in alternative regional markets. Last week, Hyundai made an announcement that it is making a $21 billion investment in the US due to the Trump tariffs.
“Conversely, this protectionist measure could create temporary advantages for US-based manufacturers and suppliers, possibly stimulating local job creation and leading to an estimated 5-10% increase in domestic manufacturing capacities but that would also work in the short term.
“In the long term, China could benefit the most from strengthened local manufacturing and automation capabilities, while smaller export-reliant economies, including the UK, could face investment losses and cost pressures.
“However, as our study highlights, increased regionalisation also carries broader economic implications, including reduced economies of scale, potentially higher prices for consumers (projected between 8-12% increases), and complexities arising from fragmented global markets.”
Loughborough is one of the country’s leading universities, with an international reputation for research that matters, excellence in teaching, strong links with industry, and unrivalled achievement in sport and its underpinning academic disciplines.
It has been awarded five stars in the independent QS Stars university rating scheme and named the best university in the world for sports-related subjects in the 2025 QS World University Rankings – the ninth year running.
Loughborough is ranked 6th in The UK Complete University Guide 2025, 10th in the Guardian University League Table 2025 and 10th in the Times and Sunday Times Good University Guide 2025.
Loughborough was also named University of the Year for Sport in the Times and Sunday Times Good University Guide 2025 - the fourth time it has been awarded the prestigious title.
Loughborough is consistently ranked in the top twenty of UK universities in the Times Higher Education’s ‘table of tables’, and in the Research Excellence Framework (REF) 2021 over 90% of its research was rated as ‘world-leading’ or ‘internationally-excellent’. In recognition of its contribution to the sector, Loughborough has been awarded seven Queen's Anniversary Prizes.
The Loughborough University London campus is based on the Queen Elizabeth Olympic Park and offers postgraduate and executive-level education, as well as research and enterprise opportunities. It is home to influential thought leaders, pioneering researchers and creative innovators who provide students with the highest quality of teaching and the very latest in modern thinking.
Later today, Donald Trump is preparing to unveil sweeping tariffs, that analysts fear could push up prices and trigger a trade war. Dr Arman Mazhikeyev, a researcher in international trade, barriers to trade, and regional trade agreements, explains what the economic implications could be for these actions.
“The introduction of sweeping tariffs on imports into America aligns closely with our research examining the 'Rise of the Regions' - a scenario in which countries respond to global trade tensions by retreating into localized production, regional trade blocs, and more self-reliant industrial strategies.
“The study showed that a trade war can accelerate regionalisation of supply chains by approximately 5-6% annually, compelling companies on both sides of the Atlantic to reconsider and potentially localise their production networks.
“Considering the 25% tariff on car imports, for European and Chinese automakers exporting to the US, this tariff represents a substantial disruption, with cost increases potentially reaching double-digit percentages, significantly reducing competitiveness in the American market.
“Businesses may respond by shifting production closer to the US or increasing investments in alternative regional markets. Last week, Hyundai made an announcement that it is making a $21 billion investment in the US due to the Trump tariffs.
“Conversely, this protectionist measure could create temporary advantages for US-based manufacturers and suppliers, possibly stimulating local job creation and leading to an estimated 5-10% increase in domestic manufacturing capacities but that would also work in the short term.
“In the long term, China could benefit the most from strengthened local manufacturing and automation capabilities, while smaller export-reliant economies, including the UK, could face investment losses and cost pressures.
“However, as our study highlights, increased regionalisation also carries broader economic implications, including reduced economies of scale, potentially higher prices for consumers (projected between 8-12% increases), and complexities arising from fragmented global markets.”
Loughborough is one of the country’s leading universities, with an international reputation for research that matters, excellence in teaching, strong links with industry, and unrivalled achievement in sport and its underpinning academic disciplines.
It has been awarded five stars in the independent QS Stars university rating scheme and named the best university in the world for sports-related subjects in the 2025 QS World University Rankings – the ninth year running.
Loughborough is ranked 6th in The UK Complete University Guide 2025, 10th in the Guardian University League Table 2025 and 10th in the Times and Sunday Times Good University Guide 2025.
Loughborough was also named University of the Year for Sport in the Times and Sunday Times Good University Guide 2025 - the fourth time it has been awarded the prestigious title.
Loughborough is consistently ranked in the top twenty of UK universities in the Times Higher Education’s ‘table of tables’, and in the Research Excellence Framework (REF) 2021 over 90% of its research was rated as ‘world-leading’ or ‘internationally-excellent’. In recognition of its contribution to the sector, Loughborough has been awarded seven Queen's Anniversary Prizes.
The Loughborough University London campus is based on the Queen Elizabeth Olympic Park and offers postgraduate and executive-level education, as well as research and enterprise opportunities. It is home to influential thought leaders, pioneering researchers and creative innovators who provide students with the highest quality of teaching and the very latest in modern thinking.
