Businesses in the era of permanent geopolitics

According to the ninth edition of WTW’s annual political risks survey, geopolitical tensions, trade barriers and indirect forms of economic confrontation now emerge as major threats to business. Highlight of this edition: the United States appears for the first time as the country where companies declare having suffered the most losses linked to political, geopolitical or credit risks. They are ahead of China, Russia, Ukraine and India, illustrating the rise in uncertainties within the world’s largest economy. The study highlights a profound evolution in the nature of risks. While armed conflicts remain a source of concern, businesses are more fearful of trade barriers and customs duties. Some 61% of respondents consider these measures difficult to manage, far ahead of international conflicts. Domestic political tensions in the United States are now seen as the main source of global geopolitical risk. They are cited by 49% of the companies surveyed, ahead of the conflict in the Middle East (46%) and the tensions in the Taiwan Strait (32%). Another area of ​​concern: so-called “gray zone” attacks against critical infrastructure. Submarine cables, oil pipelines and electrical networks have become favored targets. These actions, carried out outside a traditional military framework, are considered the main threat by 65% ​​of respondents. Faced with this more fragmented environment, companies are adapting their organization. Nearly 84% of them are preparing or considering a structural separation between their Eastern and Western activities. An unprecedented level since the creation of the survey, which testifies to the acceleration of economic decoupling between the large geopolitical blocs.