Global Risk Indexes (26-02-2025)

Global 98 (-1 ▼)
MENA 99 ( —)
APAC 98 ( —)
Europe 99 ( —)
Africa 97 (-1 ▼)
AMERs 98 ( —)
Markets 99 ( —)
Graham Westcott, Global Markets region analyst at Worldwise Analytica

Graham Westcott

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

Economic Fragmentation Intensifies: U.S.-China Tech War, Protectionist Trade Policies, and Energy Market Shocks Drive Global Instability

The global economic order is undergoing rapid and irreversible shifts as trade wars, energy disruptions, and financial volatility reshape global markets. With Washington and Beijing locked in an escalating technological and economic standoff, energy markets facing renewed uncertainty, and financial markets showing signs of stress, investors and policymakers must prepare for sustained turbulence.

U.S.-China Trade War Escalates: AI and Semiconductor Decoupling Accelerates

The Biden administration has announced new restrictions on China’s AI and semiconductor industries, effectively deepening the technological decoupling between the world's two largest economies. These measures, which target China's access to advanced computing technologies, are pushing Beijing to accelerate domestic AI and chip development while strengthening partnerships with Russia and Middle Eastern nations.

Beijing’s response has been swift. China’s DeepSeek AI expansion is raising alarms in the West, as the company rapidly advances its large-scale AI models, directly competing with U.S. firms. This has already triggered a selloff in U.S. and European tech stocks, with investors fearing that Washington’s restrictions may slow American AI development by limiting access to global markets.

Trump’s Protectionist Trade Agenda: Copper Tariffs and North American Trade Disputes

President Donald Trump is advancing his protectionist trade strategy, with new tariffs under consideration for copper imports. This move is designed to secure the U.S. supply chain for critical minerals, but it is likely to disrupt global resource markets, particularly affecting producers in Chile, Peru, and Mexico.

Simultaneously, the Trump administration is pressuring Mexico and Canada with new trade restrictions, citing unfair competition in manufacturing and agriculture. These measures could undermine the USMCA trade agreement, further complicating North American supply chains and fueling economic uncertainty across the continent.

Energy Market Volatility: Iran Sanctions and Iraq’s BP Deal Drive Oil Instability

The global energy market remains in flux as geopolitical tensions impact supply chains. The latest U.S. sanctions on Iran’s oil sector are tightening global crude availability, reinforcing inflationary pressures. With Brent crude prices fluctuating around $84 per barrel, investors are watching how Washington’s sanctions will impact China’s ability to secure long-term Iranian oil supplies.

At the same time, Iraq has signed a new deal with BP to boost crude output, signaling Baghdad’s attempt to stabilize its oil production despite regional volatility. However, with ongoing tensions between the Iraqi government and the Kurdish Regional Government (KRG), questions remain over the long-term stability of Iraq’s energy exports.

Financial Market Reactions: Investor Confidence Declines Amid Trade and AI Disruptions

Financial markets are struggling to adjust to the rapid economic shifts. Wall Street recorded its fourth consecutive decline, as investor sentiment weakened in response to U.S.-China trade tensions and AI sector disruptions. Meanwhile, U.S. consumer confidence has dropped to its lowest level in a year, reflecting growing uncertainty over Trump’s economic policies and inflation concerns.

Gold prices remain volatile, fluctuating near record highs as investors hedge against geopolitical instability. Meanwhile, the South Korean won weakened following the Bank of Korea’s latest rate cut, raising broader concerns about currency volatility in Asia.

Looking Ahead: Global Markets Face a Period of Strategic Realignment

The coming months will be defined by deepening economic fragmentation. As the U.S.-China trade war evolves into full-scale financial and technological decoupling, protectionist trade policies will continue to reshape global supply chains. Energy markets will remain volatile as resource nationalism and geopolitical tensions drive further uncertainty.

For businesses, investors, and policymakers, navigating this new reality will require strategic adaptability. Companies must diversify supply chains, hedge against currency risks, and prepare for increasing government intervention in critical industries. The era of economic integration is over—what comes next is a world where economic and security interests are fully intertwined.

Geopolitical Risk Assessment for the Global Markets
(26-02-2025)

Global markets are entering a phase of heightened instability as economic fragmentation accelerates. The U.S.-China trade war has deepened into full-scale financial and technological decoupling, with new U.S. restrictions on China's AI and semiconductor industries exacerbating tensions. Trump's trade policies, including looming tariffs on copper and new measures against Mexico and Canada, signal a broader move toward resource nationalism. Meanwhile, energy market volatility continues, with U.S. sanctions on Iran tightening global oil supply. Financial markets remain unsettled, as declining consumer confidence in the U.S. and AI-driven financial disruptions in China put further pressure on global investors. As geopolitical and economic realignments solidify, the coming months will be defined by increased trade protectionism, currency volatility, and rising resource competition.

Geopolitical Risk Index

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

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