Geopolitical and Trade Risk
Persistent Instability
Geopolitical risks have the potential to impact the global economic outlook, influencing growth, inflation, financial markets and supply chains. Conflicts, such as the Russia-Ukraine war and the Israel-Hamas war, fuel regional instability and have impacted energy and trade routes. These multifaceted conflicts underscore the interconnectedness of global affairs, necessitating nuanced strategies to navigate their complexities.
Cost savings are no longer the name of the game. While a supplier may offer the lowest price, tariff issues, climate risks and political unrest can outweigh any benefits. Firms that build geopolitical foresight and alternative sourcing plans and sales strategies are better positioned to manage their exposure to risks as they happen.
After decades of offshoring to low-cost locations many companies are now reconsidering their global supply chains and reshoring manufacturing to help adapt to changing economic and political realities. Several companies have taken steps to reshore and benefit from the CHIPS Act of 2022 aimed at advancing the U.S.’s leadership in the research, development and manufacturing of semiconductors. Significant CHIPS subsidies will help address the challenge of transitioning operations, which can involve the need to redesign the supply chain, address new regulatory issues and deal with higher costs for equipment and infrastructure.
One-third of employers globally expect geopolitical conflict to be a key driver of business transformation by 2030,[1] according to a recent report by the World Economic Forum. Findings suggest that companies that are prepared for geopolitical risk through supply chain diversification or investment and operational decisions will be better positioned to prosper through disruption than businesses that prioritize short-term defensive measures.
In the face of geopolitical tensions and concerns about widespread tariff increases, the sales and business development team at this large multinational retail corporation needed better data and analytical tools to track trade flows and evaluate the impact of new sourcing locations and trade relationships for their customers. S&P Global Market Intelligence’s Panjiva Supply Chain offering provided comprehensive and timely transactional shipment records, details on both buyers and sellers and insights on market shares and growth trends of competitors. In addition, Panjiva’s advanced Radius Search Tool let the team zero in on new prospects within designated areas that met certain criteria, such as commodity type, shipment volume, number of employees and revenues.
At the same time, in response to these events, a strategic planning team needed to monitor international trade trends, uncover trade pattern changes, measure trade impacts triggered by any global events and identify alternatives/options. The team relied on S&P Global Market Intelligence’s Global Trade Analytics Suite, a market-leading solution that provides essential trade data and insights to help identify risks and opportunities.
It is also important to obtain high-quality, independent mark-to-market prices to support risk management and product control functions during times of market disruption. S&P Global Market Intelligence’s Totem provides objective valuations to help companies verify derivative positions for their books and records reporting. Using data based on consensus of mid-market prices from the leading active market participants, Totem’s asset classes span the equity, interest rate, repo, foreign exchange, commodity, credit, XVA and bond markets, providing matrices of vanilla prices as well as a wide selection of exotic and structured products.
[1] “Global Economic Futures: Competitiveness in 2030”, World Economic Forum, June 2025, chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://reports.weforum.org/docs/WEF_Global_Economic_Futures_Competitiveness_in_2030_2025.pdf.
