The Costs of Geopolitical Rivalry for Business

In this novel study, Prof. Simon Evenett of University of St. Gallen shares insights based on the interviews with senior executives from 13 internationally-active businesses in various manufacturing and service sectors, headquartered in China, Europe, the Middle East, and North America. While the China-US rivalry is commonly identified as a geopolitical risk, firms show a wide diversity in how they comprehend geopolitical priorities of governments and respond to perceived geopolitical risks. Some view geopolitical risk as protectionism and actions against specific international firms, while others link it to supply chain fragmentation and trade challenges as consequences of pandemic and war. Furthermore, the study provides policy recommendations for the governments for minimizing commercial disruption in a volatile geopolitical environment and offers suggestions for businesses to better manage geopolitical risks.