Does international diversification assume a global order which is fast disappearing?

Tariffs promote sub-optimal allocation of capital, deliberately exchanging economic efficiency for non-economic objectives, which are unnecessary to go into detail here. Whether these non-economic objectives are worth it is not answerable here. But from a purely business perspective, obstacles to free trade reduce economic efficiency -- this is just basic economics.

The result is that tariffs skew allocation of capital here which could have gone to better uses, and increase the prices of goods made with foreign inputs. So it is not obvious that "repatriation" of investment into, say, 100% VTSAX is the best response to tariffs.

And abroad, the tariffs imposed by the US reduce sales to the US market, reducing margins. So it is not obvious that maintaining investment in international stocks is the best response to tariffs either.

Is there still a case to maintain international diversification? I had long seen it as a way to benefit from the aggregate efficiency resulting from free trade and law of comparative advantages. Or maybe now with trade barriers up, returns from different countries will actually now be uncorrelated and provide true diversification, even though the returns themselves will now be sub-optimal?

In the back of my mind I'm also concerned with whether property rights in company shares will be respected even through a world war. China, even in peacetime, has already forced some of its companies to delist from American exchanges, effectively expropriating the investments from shareholders on the American exchanges. I can only imagine what they'd do if we were at war. Let's not kid ourselves. The world is, once again, fast becoming a tinderbox.