Home Industry Supply Chain Management Rising Geopolitical Tensions a...

Rising Geopolitical Tensions and Trade Policies Heighten Global Supply Chain Risks

Supply Chain Management

Business Honor
12 March, 2025

Marsh warns that protectionist policies and geopolitical tensions increase supply chain disruptions in 2025.

The main subsidiary of the US-based professional services Marsh & McLennan Companies, Marsh Limited, is one of the top brokers of risk and insurance services in the United Kingdom. A recent Marsh analysis shows that trade protection laws and growing international conflicts are increasing the likelihood of supply chain breakdowns for enterprises in 2025.

According to the brokerage's Political Risk Report 2025, which highlights significant global political and economic trends affecting investors and multinational corporations, businesses that trade with referred to as connector nations like Vietnam, Mexico, South Korea, and Hungary may face additional delays due to changing trade regulations. The report stated that as companies work to restructure their supply chains and enhance resilience, leaders must understand that relying on connectors does not necessarily equate to true diversification.

In addition, Marsh emphasized the political and market complexity of the energy transition, resounding the World Economic Forum's Global Hazards Report 2025, which named environmental hazards as a major long-term anxiety. The paper claims that although debt-for-nature swaps are still gaining popularity and carbon credit markets made strides at COP29, both are beset by issues with political risk and possible non-delivery. According to the paper, investments in the market may also be impacted by additional political risks connected to specific carbon credit projects, such as confiscation or forced abandonment.

The paper suggested that organizations could benefit from applying strong monitoring systems and staying aware of shifting political sentiments to effectively manage compliance requirements and the uncertainties related to the application and sustainability of these regulations.