e2open: Why the End of Easy Globalisation is in Sight

The US' proposed ban on Chinese and Russian connected vehicles represents more than just another trade restriction – it signals a fundamental shift in global supply chains and international commerce.

The move adds to a growing list of technology restrictions that are reshaping the landscape of international trade.

John Lash, Group Vice President of Product Strategy at e2open, explains: "The concern about Chinese and Russian vehicles or components for connected vehicles on US roads is indeed a real national security concern and part of a larger shift of a technology demarcation between Western and Sino blocks that started five years ago with the Huawei telecom infrastructure ban."

The stakes for connected vehicles are particularly high. Unlike previous technology restrictions, connected vehicles pose unique risks due to their dual capability to collect sensitive data and potentially affect physical infrastructure.

John continues: "The stakes are even higher for connected vehicles because they have access to detailed information about critical infrastructure, and the potential to disable or even control vehicles remotely – just like in a dystopian sci-fi movie."

Beyond security: The economic dimension

While the proposed ban was put forward by the outgoing Biden administration – and is now in the hands of the Trump administration – there exists a bipartisan consensus on the need for national security protections against foreign tech infiltration.

However, economic factors also play a significant role, particularly in the electric vehicle (EV) sector.

Earlier this year, the White House took decisive action against what it perceived as unfair competition from Chinese manufacturers.

"Chinese subsidies permit EV manufacturers to produce below-cost and position them to flood global markets with under-priced vehicles, potentially destabilising emerging US and European industries," says John.

"These unfair trade practices prompted the White House to impose a 100% tariff on EVs from China last year, essentially barring imports by making them prohibitively expensive."

However, the latest proposed ban takes an even more definitive stance.

John adds: "National security always outranks trade protections and this move is more definitive, calling for an all-out ban regardless of how much consumers are willing to pay."

Strategic control of critical resources

Another crucial aspect of this geopolitical puzzle involves the control of essential minerals needed for clean energy transition, which looks set to shape the next century. 

China's strategic positioning in this sector adds another layer of complexity to the situation.

"Chinese policy to invest in securing mineral rights and processing key elements like cobalt, lithium, graphite, nickel and manganese gives Beijing a market lever," John observes. 

"If used for political purposes, China's control of these minerals can give domestic manufacturing another unfair trade advantage and, worse yet, threaten the supply of raw materials to Western nations."

The end of easy globalisation

The implications of the aforementioned developments extend far beyond the automotive sector. In fact, John predicts that the trend of increasing restrictions will continue and spread globally.

"One of my beliefs is that the days of easy globalisation are over," he says. "The rise in nationalism, with restrictions in technology or access to global financial systems driving increased regionalisation, is like a canary in the coal mine."

This shift suggests a fundamental change in how global supply chains will operate in the future.

John concludes: "The proposed ban of connected vehicles from China and Russia is a poster child example of the types of restrictions we can expect going forward – restrictions that collectively make global trade a little harder tomorrow than it was yesterday."

For supply chain professionals, these developments necessitate a strategic reassessment of global sourcing and risk management approaches. As technology restrictions continue to multiply and national security concerns increasingly influence trade policy, companies must adapt to a new reality where global commerce is more complex and regionally focused than ever before.

In addition to the sweeping executive orders imposing tariffs on America’s largest trading partners, as well as all imports of steel and aluminium, the proposed connected vehicle ban serves as a another indicator that the era of unrestricted global trade is coming to an end.

In its place is a new paradigm where political pressure and national security considerations play an increasingly dominant role in shaping international commerce.

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