One of the biggest puzzles in the global economy right now is the slowdown in trade.

Since 2012, global trade has been growing at just 3% a year, less than half the rate in the previous three decades. Between 1985 and 2003, it grew twice as fast as global gross domestic product; in the last four years, trade has barely managed to keep pace, according to the International Monetary Fund.

What’s more, this slowdown has been across the board, affecting both developed countries and emerging economies, trade in services as well as goods.

The World Trade Organization is now forecasting that world trade will grow by just 1.7% this year, making this the first year in 15 years it has grown more slowly than the world economy.

This slowdown is worrying because of what it may augur for the long-term health of the global economy. The globalization of recent decades has been a major driver of rising living standards across the world. Citizens of developed countries benefited from falling prices while those in emerging economies benefited from better paid jobs.

It has been a tenet of economic thinking for two centuries that trade benefits both parties, through increased specialization, greater efficiency, the exchange of ideas and ultimately increased innovation and productivity. It is productivity growth which ultimately drives wages and growth.

The “good news” is that so far three-quarters of the slowdown appears to be the result of a collapse in investment rather than deliberate actions by governments, according to an analysis by the IMF in its latest World Economic Outlook.

In this respect, slowing world trade is primarily a symptom of the wider economic malaise that the world has been grappling with since the start of the global financial crisis: If policy makers can find a way to revive investment—whether by boosting demand or unblocking impediments to supply—then trade should pick up too.

But the IMF also concluded that the rest of the slowdown was largely explained by a reduction in the pace of trade liberalization and rising protectionism. Between 1985 and 1996, global tariffs fell at a rate of roughly 1 percentage point a year; between 1995 and 2008, this had slowed to 0.5 percentage points a year; since 2008, tariff reduction has largely ground to a halt. Similarly, the pace of new free trade agreements has fallen from 30 a year in the 1990s to just 10 a year since 2011.

Meanwhile, there has been a sharp uptick in the number of new trade barriers—whether in the form of anti-dumping measures or retaliatory duties—in the last two years, with the WTO’s Global Trade Alert recording the highest ever number of harmful measures in 2015.

The risk now is that politics, economics and finance are combining in a way that threatens to throw globalization in reverse, hanging a sword of Damocles over the world economy.

Years of sluggish growth, stagnant wages and rising inequality are fueling a growing political backlash against what some say is unfair competition from foreign firms and foreign workers across developed countries, most clearly in the U.S. election campaign and in the Brexit vote.

That, in turn, is raising fears among businesses that new barriers to cross-border trade will emerge, not least between the U.K. and the European Union. At the same time, political instability is making it harder for governments to pursue the structural reforms needed to encourage investments and so boost growth and productivity.

What makes the current hostility to globalization so alarming is that it comes at a time when central banks are clearly running out of tools to support the economy.

Until now, central banks have been able to respond to weak global growth by driving down interest rates in an attempt to encourage investment. But with interest rates already close to or in some cases below zero across the developed world and yield curves flat, many now fear that ultraloose monetary policy risks doing more harm than good—in particular by undermining bank business models to such a degree that they may end up restricting the supply of credit or charging more for loans. In the case of Deutsche Bank, doubts over its business model has led some to even question its survival.

In this fragile environment, every political shock that raises further doubts about the future of globalization risks pushing the global economy closer to the precipice, since every downgrade to global growth forecasts leads to a lowering of inflation expectations. That pushes up real effective interest rates, leading to an unwanted tightening of monetary policy to which central bankers feel they must respond.

Brexit has made that risk greater. At the Conservative Party conference in Birmingham, England this week, government ministers talked excitedly of the opportunities for free trade that would arise as result of quitting the EU. But this rhetoric has yet to be tested by reality: behind the scenes, the conference was awash with lobbyists demanding protection from what Prime Minister Theresa May called the “speed bumps” ahead.

Meanwhile in the eyes of the rest of the world, Brexit has been viewed as a clear vote against globalization. It is a potentially pivotal moment at which the centripetal forces that for 70 years fueled deeper European economic integration gave way to the centrifugal forces of disintegration, raising the specter of political contagion that results in further impediments to cross-border trade.

The world may be struggling to live with globalization, but it doesn’t know how to live without it either.