Global Risk Indexes (20-01-2025)

Global 96 (0 —)
MENA 95 (-1 ▼)
APAC 98 ( —)
Europe 99 (+1 ▲)
Africa 93 (+1 ▲)
AMERs 98 ( —)
Markets 95 ( —)
Graham Westcott, Global Markets region analyst at Worldwise Analytica

Graham Westcott

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

Trade Wars, Energy Struggles, and Structural Crises Define a Volatile Global Landscape

Global markets are reeling from the impacts of protectionism, resource nationalism, and structural economic vulnerabilities. The inauguration of Donald Trump for a second term has reignited trade tensions, with sweeping tariff announcements targeting China, Mexico, and Canada. The proposed 60% tariffs on Chinese goods and a 25% surcharge on Canadian and Mexican imports represent a seismic shift in global trade policy, with immediate repercussions for global supply chains, inflation, and economic growth.

Energy markets remain under strain amid geopolitical uncertainty. Oil prices have dipped slightly on speculation that Trump may ease sanctions on Russia's energy sector in exchange for a Ukraine peace deal, yet volatility persists. Disruptions in the Red Sea due to Houthi attacks, combined with the Biden-era sanctions on Russian oil tankers, have created logistical bottlenecks and inflated shipping costs. Meanwhile, Libya's ambitious plans to increase production to 2 million barrels per day signal opportunities but are fraught with risks due to political instability and outdated infrastructure.

China's demographic crisis and economic strategy signal long-term structural challenges. With its population continuing to decline, Beijing faces mounting pressure to balance domestic resilience with global influence. Efforts to revitalize the Belt and Road Initiative and expand foreign investments highlight China's intent to counterbalance its vulnerabilities. However, a lack of robust healthcare infrastructure in rural areas exacerbates inequality, risking further socioeconomic instability.

Fiscal pressures in advanced and emerging economies compound systemic risks. Italy's public debt surpassing '3 trillion and Saudi Arabia's downgraded growth projections illustrate how structural vulnerabilities are constraining fiscal policy. South Korea, despite record export surpluses, has pledged unprecedented support for exporters to mitigate risks from U.S. trade policies, underlining the global ripple effects of protectionism.

Technological decoupling accelerates as geopolitical rivalries deepen. Taiwanese firms preparing to relocate production from China to the U.S. and Vietnam reflect the growing fragmentation of global tech supply chains. These moves are driven by both U.S. tariffs and Taiwan's strategic shift to diversify investments away from mainland China, signaling a reconfiguration of the global technology ecosystem.

Emerging markets show resilience but remain vulnerable. Argentina's strong trade surplus and Turkey's revitalized M&A activity highlight the opportunities for resource-rich nations, yet inflationary pressures and geopolitical risks remain constraints. Similarly, Egypt faces mounting fiscal challenges as Suez Canal revenues dip due to regional instability, highlighting the vulnerabilities of resource-dependent economies.

Strategic adaptation is crucial in this multipolar world order. Policymakers must prioritize securing critical supply chains, fostering trade diversification, and addressing demographic and fiscal imbalances. Investors should focus on sectors poised for growth, including renewable energy, critical minerals, and advanced technology. Navigating these systemic risks requires a forward-looking, collaborative approach.

Geopolitical Risk Assessment for the Global Markets
(20-01-2025)

Global markets are navigating heightened risks as protectionist policies, energy market disruptions, and demographic challenges reshape economic and geopolitical realities. Key trends include the escalating U.S.-led trade wars, volatility in energy markets linked to Middle Eastern instability, and structural vulnerabilities in China and advanced economies. Short-term risks are concentrated in trade realignments, energy security, and inflationary pressures, while long-term risks focus on demographic crises, resource competition, and geopolitical fragmentation. Policymakers and investors must adapt to a fragmented global order where economic resilience hinges on strategic foresight and collaboration.

Geopolitical Risk Index

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

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