Navigating New Economic Nationalism: Why BVI And International Finance Centres Remain More Relevant Than Ever

In recent years, we've witnessed a significant shift toward protectionism. Nations are emphasising self-sufficiency and national sovereignty, believing that shielding domestic industries will lead to greater prosperity and security. Political leaders find it expedient to safeguard local jobs and industries rather than promote free trade. Consequently, barriers to both inter- and intra-regional trade are increasing—not only through traditional tariffs and quotas, but also via stringent immigration policies, complex regulatory requirements, sanctions, and divergent technology standards. Combined with escalating climate emergencies and the rapid rise of digital assets, the economic landscape has become more unpredictable and complex.

 The Resurgence Of Trade Barriers

Central to this new economic nationalism is the resurgence of tariffs and trade restrictions. Governments are using these tools to protect domestic industries from foreign competition. The threat of escalating tariffs creates uncertainty in global markets, disrupting supply chains and increasing costs for businesses and consumers alike.

During his first tenure, US President Donald Trump adopted a protectionist trade policy, imposing tariffs on billions of dollars' worth of imports from key trading partners like China, the European Union, Canada, and Mexico. These measures aimed to reduce trade deficits and protect American jobs, but also sparked retaliatory actions, leading to trade tensions that strained diplomatic relations and hindered global economic growth. Trump's administration withdrew from international agreements such as the Trans-Pacific Partnership (TPP), and renegotiated others like the North American Free Trade Agreement (NAFTA), resulting in the United States-Mexico-Canada Agreement (USMCA). His approach underscored a shift toward unilateralism and skepticism of multilateral institutions, reflecting broader trends in economic nationalism.

He called it ‘protecting American jobs’; others called it the beginning of a trade war.  Now, with his return to the White House in 2025, Trump is raising the stakes, proposing sweeping new tariffs on Canada, Mexico, and BRICS nations. His message is clear: protectionism is back, and the rules of global trade are changing fast.

Trump promised to impose a 25 per cent tariff on imports from Canada and Mexico until they clamp down on drugs, particularly fentanyl, and migrants crossing the border. He separately outlined "an additional 10 per cent tariff, above any additional tariffs" on imports from China.

 Historical Context To A Shifting Global Order

To understand the current shift, it's helpful to revisit the economic theories and historical dynamics that have shaped our global economy. The concept of a hegemon—a dominant global power that enforces rules and norms—has been central to international relations. After World War II, the United States emerged as the hegemon, establishing institutions like the United Nations (UN), the World Bank, the International Monetary Fund (IMF) and the World Trade Organisation (WTO), to promote global stability, trade and economic growth. The US championed free trade, open markets, and the liberal international order, facilitating unprecedented economic expansion. The United States dollar was established as the world’s reserve currency.

Economists like Adam Smith, David Ricardo, and Paul Krugman, have highlighted the benefits of free trade and open markets, arguing that larger markets allow for greater specialisation, economies of scale, and increased prosperity. However, as new economic powers like China have risen, the unipolar dominance of the US has been challenged. The relative decline of the hegemon has led to a more multipolar world, with emerging economies asserting greater influence. This shift, coupled with growing skepticism of multilateral institutions, has fueled the resurgence of economic nationalism, as countries reassess their positions in the global order.

The Rise Of BRICS And ‘De-Dollarisation’

The BRICS nations—Brazil, Russia, India, China, and South Africa—have taken centre stage in this reshaped world. With their recent expansion to include countries like Saudi Arabia, the UAE, Iran, Egypt and Ethiopia, BRICS is flexing its collective muscle. The goal? Reduce reliance on the US dollar and build a financial system independent of Western influence.

China’s extraordinary economic rise has been a key driver of this movement. Over the past four decades, it has transformed into a global powerhouse, challenging the status quo. BRICS nations are exploring local currencies and digital assets as alternatives to the dollar, signaling a significant shift in global economic dynamics.

But not everyone is on board.  President-elect Trump has threatened to impose 100 per cent tariffs on BRICS nations if they proceed with creating an alternative currency to the dollar. 

Impact On International Finance Centres

This new protectionist wave is reshaping the role of international finance centres (IFCs). With more complex regulations and shifting trade dynamics, many are consolidating operations and focusing on core jurisdictions. For centres like the British Virgin Islands (BVI), this presents both challenges and opportunities.

IFCs have embraced their role as hubs for global trade and investment, positioning themselves as specialist jurisdictions that adapt to the needs of an evolving economy. By honing their expertise and embracing innovation, the IFCs remain relevant and continue to serve as bridges for cross-border trade, investments, and finance, in an increasingly fragmented world.

Why IFCs Are More Relevant Than Ever

1. Providing Stability Amidst Uncertainty

Ongoing conflicts, such as tensions in the Middle East and the Ukraine-Russia situation, add to global economic uncertainty. In a world where traditional gatekeepers are seen as less effective, IFCs like the BVI offer stable and reliable jurisdictions for international business. BVI, for example, with its robust legal system, based on English common law, provides predictability and trust for investors. The BVI maintains a neutral stance, making it an attractive location for businesses from various countries, especially in times of geopolitical tensions. By adhering to international regulatory standards, and participating in global efforts to enhance transparency and combat financial crimes, the BVI enhances its credibility and remains a trustworthy partner in the international financial community.

2. Offering Multidisciplinary Expertise

As cross-border activities become more complex due to new economic nationalism and the changing global order, there's an increasing need for offshore advisory and support services. The BVI's professional firms offer multidisciplinary expertise, helping businesses navigate these complexities. With specialised legal services in corporate law, trusts, and dispute resolution, along with financial services including fund formation, wealth management, and corporate services, the BVI provides comprehensive support for international businesses.

3. Serving As A Neutral Jurisdiction For Sophisticated Services

There's a growing demand for sophisticated services from neutral jurisdictions, and the BVI fits this need perfectly. It offers services that are not tied to any single country's economic policies or political agendas. The BVI's tax regime is designed to facilitate international business without creating additional tax burdens, avoiding double taxation, and enhancing efficiency. While adhering to international transparency standards, it offers a level of confidentiality that clients value. BVI financial services firms have been instrumental in numerous high-value, sophisticated transactions, including initial public offerings (IPOs), mergers and acquisitions, and complex corporate restructurings, showcasing the jurisdiction's ability to meet the needs of global businesses with precision and expertise. Its efficient business environment, with streamlined processes for company incorporation and regulatory approvals, further enhances its appeal.

4. Leveraging Pan-Geographic Credentials

The BVI's reach extends beyond any single region. Its pan-geographic credentials mean it can serve markets worldwide, addressing the challenges posed by new economic nationalism and the evolving global order. Serving clients from emerging markets and established economies alike, the BVI is strategically positioned to facilitate business across different time zones. Its participation in international treaties and agreements enhances cross-border cooperation, ensuring businesses can operate smoothly in multiple jurisdictions.

5. Complexity Of Cross-Border Activity And The Need For Expertise

Governments worldwide are tightening their fiscal policies and implementing austerity measures. There's a focus on reducing tax evasion and avoidance to raise additional revenues, leading to international initiatives like the OECD's Pillar One and Pillar Two. Pillar One seeks to redistribute taxing rights to countries where consumers are located, affecting digital companies and international businesses. Pillar Two introduces a global minimum corporate tax rate, reducing incentives for profit shifting.

These changes add complexity to cross-border transactions. Businesses need expert guidance to navigate the new tax landscape, and the BVI's professionals are well-equipped to provide that expertise. By staying abreast of international developments and adapting to new regulations, the BVI ensures it remains a valuable partner for companies operating globally.

6. Embracing Digital Assets: The Future of Finance

One of the most transformative developments in global finance is the rise of digital assets. Cryptocurrencies, blockchain, and FinTech innovations are redefining how money moves and how value is stored. Recognising this, the BVI has taken bold steps to lead in this space.

The Virtual Assets Service Providers Act, 2022 (VASP Act) sets a gold standard for regulating virtual asset service providers. With clear licensing and compliance requirements, the BVI ensures businesses meet international anti-money laundering (AML) and counter-terrorist financing (CTF) standards and operate transparently and responsibly. With cybersecurity protocols, investor protection regulations, and collaboration with international bodies, it stays ahead of emerging threats. This proactive stance not only attracts FinTech innovators, but also addresses risks like cybercrime and market volatility, creating a secure environment for growth.

Navigating The Future Together

The rise of new economic nationalism and the rapid evolution of digital assets present both challenges and opportunities. As the global order evolves and countries reassess their positions on trade, taxation, and international cooperation, businesses and investors must navigate an increasingly complex environment. The threat of tariffs, trade restrictions, and sanctions, alongside the risks associated with digital assets and financial crime, add layers of difficulty, creating uncertainties that can hinder growth and disrupt international partnerships.

The BVI is not just adapting to these changes—it's leading the way. By embracing digital assets while diligently addressing associated risks, implementing forward-thinking legislation, and offering a stable and innovative environment, the BVI enables businesses and investors to adapt and thrive. Its role as a specialist international finance centre is more critical than ever, providing the expertise, neutrality, and security needed to facilitate trade, business, and finance across borders.

In a world where borders are tightening and traditional institutions are struggling, the BVI remains open—open to innovation, open to global business, and open to shaping a prosperous future. By leveraging its strengths, embracing the digital revolution, and proactively managing risks, the BVI not only ensures its own success, but also contributes to the global economy's resilience and adaptability.

As we look ahead, it's clear that adaptability, expertise, strategic positioning, and a commitment to security will be key. The BVI exemplifies how embracing these qualities can turn challenges into opportunities, paving the way for continued success in the new era of economic nationalism and digital finance. Together, we can navigate these changes, leveraging innovation, collaboration, and responsible practices to build a future where global trade and cooperation continue to flourish, even in a more protectionist world.

Elise Donovan
CEO