A split between the U.S. and its traditional allies, if it becomes a permanent feature of the new global order, would lead to deeper fragmentation among the world's market-oriented democracies. That will surely shift the long-term balance of power in China's favor, as it moves steadily toward becoming the world's largest economy.

Labor, no matter how inexpensive, will become a less important asset for growth and employment expansion, with labor-intensive, process-oriented manufacturing becoming a less effective way for early-stage developing countries to enter the global economy.

For physical goods, there are costs associated with logistics and lead times, owing to inventories and poor forecasts of the market. With digital capital-intensive technology, however, production will inevitably move toward the final market, wherever it is. This re-localization constitutes a major shift in the structure of global supply networks.

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