Macroeconomic conflict and geopolitical volatility were among the top five threats to growth anticipated by CEOs, according to the latest PWC survey, published in January 2022. After Russia’s invasion of Ukraine in February of this year, geopolitical volatility and macroeconomic conflict have the potential of leading the threat to growth as reflected in the latest McKinsey’s Economic Competition Outlook. For US international corporations, emerging geopolitical trends are affecting the operational environment in host countries around the globe in five major ways.
Shifting alliances.
New and shifting regional economic blocs and security alliances are complicating market entry. As an example, firms in the US looking to enter the Chinese market may experience political and regulatory challenges that can increase the cost of doing business. The same can be said about Chinese firms looking to enter the US market. Similarly, countries with increasingly close relationships with either the US or China can reap economic rewards as a result is the world’s largest trading bloc, overtaking NAFTA and EU-28 and encompassing 30 per cent of global GDP.
