Geopolitical alignment becomes essential for internationally exposed firms amid new trade paradigm

Core Insights - The international trade landscape has been significantly altered in 2025 due to U.S. tariff deals, with national security alignments becoming crucial for global businesses [1][2] - The latest Political Risk Index by Willis aims to help firms navigate the complexities of tariff geopolitics [1][2] Trade Dynamics - The U.S. is requiring trading partners to align with its national security interests, or face economic penalties, reshaping the global trade environment [2][6] - The West is losing influence in Africa, as many countries are realigning towards Russia and other non-Western partners due to reduced U.S. aid and trade preferences [2][6] Strategic Implications for Companies - Companies must integrate tariff management into their core strategic planning rather than treating it as a compliance issue [3][6] - Tariff deals are creating a "moat" around the West, with requirements for signatories to comply with U.S. national security policies, affecting supply chain adaptability [6] Geopolitical Realignments - Countries like Vietnam, Cambodia, and Ecuador have aligned with the Western bloc, while major economies such as Brazil, India, and South Africa remain uncertain in their alignment [6] - Tariff pressures have led to limited retaliation, with only China and Canada significantly responding to the 2025 tariffs [6] Competitive Landscape - Initial reactions to tariffs in countries like Brazil and Indonesia have shifted from outrage to competition, as governments seek to negotiate favorable tariff rates to attract investment [6]