Geopolitical Risk & Trade

What's Happening in Geopolitical Risk & Trade

Geopolitical risk and trade tensions are intensifying across multiple regions and sectors, with protectionist measures and strategic competition reshaping supply chains and bilateral relationships. U.S.-Canada trade friction has escalated sharply, with tariffs on imports worth approximately $1 billion now affecting cross-border supply chains in automotive, agriculture, dairy, and spirits sectors, prompting Canadian firms to diversify away from American economic ties and creating currency and commodity price pressures. Simultaneously, the U.S. is pursuing energy and investment partnerships with South Korea on Alaska liquefied natural gas while facing hesitation from Seoul, linking energy infrastructure to broader trade and strategic positioning in Asia. Within Europe, Spain's strengthening ties with China are triggering EU cohesion concerns over collective China policy, while regional tensions within the U.K. over whisky production incentives reflect how trade and regulatory support are being allocated unevenly across member states. China's tightening regulatory environment—including AI restrictions and oversight of technology applications—combined with its dominant control over cobalt supplies critical to battery production, underscores how geopolitical competition is reshaping technology development strategies and supply chain dependencies globally. Meanwhile, U.S. military incidents in Japan, India's open disputes with the Trump administration over trade and counterterrorism, and escalating conflict in Myanmar signal that geopolitical friction is extending beyond traditional trade channels into defense relationships, regional stability, and humanitarian concerns that can disrupt economic activity and cross-border flows. These overlapping tensions—protectionism in North America, strategic competition in Asia, regulatory divergence in technology, and resource concentration in critical supply chains—are creating a complex environment where trade policy, energy security, military positioning, and supply chain resilience are increasingly intertwined.