The Globalization Crisis: Why We’re in this Mess

Since the 1980s, we’ve been told that globalization would make life better. Trade deals would create new markets, technology would connect us, and businesses would thrive in an open world. And there have been remarkable gains. But globalization came with an unintended consequence—governments lost control over the forces shaping their societies.

Consider a simple example: a Canadian factory making cars depends on parts from the US, China, and Mexico. If there’s a political dispute in, say, Detroit, the whole process can shut down—not because of any decision made in Canada, but because global supply chains have made national borders far less relevant.

This growing interdependence between countries affects more than economies. Wildfires in California contribute to climate change in Mexico. The 2008 financial crisis on Wall Street triggered job losses worldwide. The COVID-19 virus from China caused a global pandemic. Cyberattacks on US companies have exposed Canadian data. Problems that once had local solutions now require cooperation between governments, companies, and institutions—none of which fully trust each other or move at the same speed.

Modern governments weren’t designed for this level of interdependence. They are working with outdated tools—laws, institutions, and bureaucracies built for a world where a country’s biggest problems were mostly its own. That world belongs to the past. Key issues today are increasingly international or global, and this trend will continue—but perhaps without democratic governments in the lead.

Interdependence has become fertile ground for populists. Governments seem incapable of fixing major crises, and people are getting frustrated. There’s a sense that no one is really in charge anymore. Leaders like Trump claim they can “take back control.” But instead of offering real solutions, they push simplistic answers—blaming elites, foreigners, or international institutions—while avoiding the real issue: The complexity of these systems now exceeds our governments’ capacity to manage them well.

AI: The Only Tool that’s Up to the Challenge

If globalization is creating a governance crisis, then we must figure out how to rebuild governments’ capacity to govern effectively in this new environment. This is not just about better processes or new ideas.

To meet this challenge, governments need a new generation of tools—tools that can map these complex global systems, reliably and in detail. They need the capacity to inspect every corner of the system to identify key issues and bottlenecks, propose effective solutions, and monitor implementation. This sets a high bar and there is only one tool on the horizon that might clear it: Artificial Intelligence.

AI-driven analytics, predictive modeling, and automated decision systems are examples of the kinds of tools that governments need. They can help policymakers navigate complexity, coordinate across borders, and make more effective decisions. Recent AI breakthroughs, from OpenAI’s reasoning models to AI-driven logistics systems, already show how these tools can make sense of massive global systems in real time. Without such tools, these systems will eventually grind to a halt—and the global economy along with them.

We are approaching a watershed moment. AI will yield a new generation of tools and, one way or another, governments will almost certainly use them to solve the crisis. The real question is: What kind of governments and to what ends?

Trump Sees this Shift—But He’s Not Here for Democracy

Trump, despite his rhetoric, is not fighting to restore the old world of nation-states and trade balances. He understands—perhaps instinctively—that we are entering a new global order, one in which AI will play a central role in determining economic and geopolitical power.

His policies reflect this. His tariffs, restrictions on China’s semiconductor access, and economic maneuvers are not just about “bringing jobs back to America”—they are about securing US dominance in AI-driven globalization. Trump himself rarely articulates this vision, but his administration’s actions—targeting semiconductor production, tightening export controls, and shifting industrial policy—show a keen awareness of AI’s strategic role.

This is why Canada’s response must go beyond counter-tariffs and economic protections. If we treat this as a conventional trade war, we will miss the bigger play Trump is making.

Canada’s challenge is not just to protect its economy from Trump’s tariffs—it is to ensure that we are not left behind in the AI-driven transformation of global power. Here are three basic steps forward:

1.Reframe the Debate – Stop treating Trump’s tariffs as conventional trade disputes. Recognize that AI is now a key driver in geopolitics, and Trump’s actions reflect this reality.

2.Invest in AI Governance and Infrastructure – If Canada does not build its own AI capabilities, it will enter this new era dependent on the AI infrastructures of Washington, Beijing, or Silicon Valley.

3.Forge AI-Based Alliances – Canada must align with other nations that recognize this shift and are willing to cooperate to ensure a multipolar AI future that is not dominated by a single country.

The AI Age is not coming—it is already here. Trump, whether by intuition or advice, is acting on the understanding that AI will be a key driver of geopolitical power. If Canada fails to recognize this, we risk not only economic vulnerability but a loss of sovereignty itself.

Don Lenihan PhD is an expert in public engagement with a long-standing focus on how digital technologies are transforming societies, governments, and governance. This column appears weekly. To see earlier instalments in the series, click here.