Global Risk Indexes (12-02-2025)

Global 97 (-1 ▼)
MENA 98 ( —)
APAC 96 (-2 ▼)
Europe 97 ( —)
Africa 97 ( —)
AMERs 98 ( —)
Markets 98 (-1 ▼)
Graham Westcott, Global Markets region analyst at Worldwise Analytica

Graham Westcott

Navigating Global Intersections: Where Trade, Finance, Energy and Geopolitics Converge

Global Economic Stability at Risk: Trade War Retaliation, Energy Supply Shocks, and AI Competition Intensify

Geopolitical and economic turbulence continue to reshape global markets, as trade conflicts, energy disruptions, and technological competition intensify. The global economy is experiencing a historic realignment, with businesses and investors forced to reassess strategies amid deepening uncertainty.

U.S.-China Trade War: Retaliation Escalates, Supply Chains Under Pressure
The ongoing U.S.-China trade dispute took another turn as Beijing imposed new tariffs on American tech products while further restricting exports of rare earth minerals and battery components. Washington responded with additional sanctions on Chinese AI firms, exacerbating tensions in an already strained global supply chain.

Financial Markets React: Stock Market Volatility and Currency Adjustments
Global equities faced renewed selling pressure, with the S&P 500 falling 2.5% and the Hang Seng Index dropping 3.2%. The Chinese yuan continued its downward trajectory as Beijing seeks to offset export declines, while the U.S. dollar strengthened, adding strain to emerging markets already facing capital outflows.

Energy Markets in Turmoil: Oil Prices Surge Amid Red Sea Disruptions
Brent crude rose to $89 per barrel as continued attacks on shipping routes in the Red Sea created further bottlenecks in global energy flows. OPEC is under pressure to adjust production levels to stabilize prices, while the U.S. is considering releasing additional strategic reserves to mitigate price shocks. The persistence of supply chain disruptions is raising inflationary concerns for energy-dependent economies.

AI and Semiconductor Decoupling Accelerates
The battle for dominance in AI and semiconductor technologies is intensifying. China has announced $50 billion in new funding to expand domestic chip production and reduce reliance on Western technology. Meanwhile, the U.S. and European Union are ramping up restrictions on Chinese firms' access to critical AI technologies. The result is an increasingly fragmented global technology landscape, where innovation is being shaped by national security considerations rather than purely economic efficiency.

Central Banks Face Policy Dilemmas
The Federal Reserve and European Central Bank are struggling to balance inflation risks with the need for economic stimulus. Rising energy prices and supply chain disruptions are driving inflation higher, yet economic growth remains sluggish. This policy dilemma is creating uncertainty in bond markets, with investors uncertain about the direction of interest rates.

Strategic Considerations for Investors and Businesses:

  • Supply Chain Diversification: Businesses must accelerate efforts to reduce reliance on China for key materials as trade restrictions expand.
  • Energy Price Volatility: Investors should monitor geopolitical risks and OPEC decisions as oil prices remain unpredictable.
  • Technology Realignment: AI and semiconductor supply chains are shifting, requiring strategic investment adjustments in key industries.
  • Monetary Policy Uncertainty: Central bank policies remain unclear, making risk management essential for businesses and financial institutions.

As geopolitical and economic disruptions persist, businesses and investors must adapt to a rapidly changing global landscape where long-term strategic flexibility is key to navigating uncertainty.

Geopolitical Risk Assessment for the Global Markets
(12-02-2025)

The global economy is under sustained pressure as trade disputes deepen, energy markets experience persistent volatility, and geopolitical fragmentation accelerates. The U.S.-China trade war continues to escalate, with new restrictions on critical raw materials and retaliatory tariffs disrupting supply chains. Meanwhile, energy prices remain volatile due to shipping disruptions in the Red Sea, ongoing sanctions, and OPEC+ policy uncertainty. The AI and semiconductor race is driving further global economic bifurcation, forcing businesses to adjust supply chains and governments to rethink industrial strategies. Investors must navigate a complex landscape where inflationary pressures persist alongside slowing economic growth.

Geopolitical Risk Index

Developments to Follow for the Global Markets (See All Global)

Previous Briefings

See all previous briefings