#1

President Trump and the Return of Protectionism

President-elect Donald Trump announced plans to impose significant tariffs on the U.S.'s top trading partners—Canada, Mexico, and China—fulfilling campaign promises that could lead to trade wars. He pledged a 25% tariff on imports from Canada and Mexico, citing issues like drug and migrant flows, and an additional 10% tariff on Chinese goods linked to the opioid fentanyl. These measures appear to violate the U.S.-Mexico-Canada Agreement (USMCA) and may disrupt trade relations. Trump’s tariffs are seen as a negotiating tactic to pressure USMCA renegotiations ahead of its 2026 review. His threats caused market turbulence, including a rally in the dollar and declines in the Canadian dollar, Mexican peso, and global stock markets. Analysts and foreign leaders, including Canada and Mexico, criticized the approach, warning it could harm economies and fail to address underlying issues. China responded by reaffirming its anti-drug cooperation with the U.S. while rejecting trade war rhetoric. Economists warn that Trump’s proposed tariffs could revive 1930s-level protectionism, fuel inflation, collapse U.S.-China trade, and upend global supply chains. Investors are revisiting strategies from Trump's first presidency to navigate his recent trade-related announcements. Despite initial market jitters, investors see the announcements as part of Trump's familiar negotiation tactics rather than finalized policies. Stocks of automakers and manufacturers with ties to Mexico, such as Honda and Foxconn, saw declines, though expectations of eventual negotiation mitigated some concerns. China will likely accelerate efforts toward self-reliance in response to potential sanctions. Importantly, the world is increasingly likely to become more protectionist, not just with the United States. Free markets are no longer seen as the best economic system, and the corporations will have to navigate a less interconnected global economy.

#2

EU and China Negotiate Tariffs on EVs

The European Union and China are in discussions to find alternatives to recently imposed tariffs on Chinese electric vehicles (EVs), with one option being a minimum price for imported Chinese EVs to address alleged state subsidies. However, no resolution is imminent, as talks face ongoing challenges. The EU had raised tariffs on Chinese EVs to as high as 45.3%, following an investigation concluding that Chinese subsidies artificially lowered their prices. While some EU officials suggest progress, others deny that an agreement is close. The tariffs have sparked division within Europe and retaliation from China, with its Chamber of Commerce criticizing the move as "protectionist" and "arbitrary." However, as related to the above description of Trump’s tariffs, this is a further indicator that many regions will increase protectionist measures to support their domestic industries.

#3

Businesses Need to Prepare for Conflict

Elisabeth Braw, a senior fellow at the Atlantic Council, authored an op-ed in POLITICO that has spread throughout the security and business community. She argued that recent incidents, such as the deliberate cutting of undersea communications cables in the Baltic Sea, highlight a growing trend of private companies being targeted in geopolitically motivated attacks. Arelion, a Swedish company, had a cable linking Sweden and Lithuania severed, with a Chinese bulk carrier identified as the prime suspect. This follows similar sabotage events involving undersea cables and pipelines, often attributed to nonmilitary tactics by nations like Russia and China. Such actions are part of a broader pattern where private businesses—especially those operating critical infrastructure like cables, pipelines, and offshore installations—find themselves on the front lines of geopolitical conflict. For Braw, geopolitical risk is now an urgent concern for businesses, which corporations have increasing focused on. The op-ed is an indicator, though, that the foreign policy establishment and governments will likely take this more seriously because the author came from a think tank. Understanding the importance of geopolitics for corporations is now spreading outside of the usual spaces.

In addition, NATO’s top military official, Dutch Admiral Rob Bauer, called on businesses to prepare for wartime scenarios by adapting their production and supply chains to reduce vulnerability to geopolitical coercion from nations like Russia and China. This was followed by six U.S. intelligence agencies issuing a joint warning about Russian sabotage operations targeting the defense industrial base, especially entities supporting Ukraine. These efforts include recruiting proxies like criminals and insiders to attack European military installations, logistics facilities, and public utilities. Recent examples include arson plots in the UK and Poland and an assassination attempt on a German arms manufacturer’s CEO. To mitigate risks, organizations are advised to:

1. Strengthen partnerships with law enforcement and intelligence agencies.
2. Enhance security measures, including physical and cybersecurity systems, employee training, and monitoring.
3. Improve personal security for employees, particularly those involved in sensitive work.
4. Diversify supply chains to build resilience against disruptions.

Altogether, it appears that governments, think tanks, and militaries are increasingly focused on improving the monitoring and security for corporations, which is a positive indicator for business operations ability to navigate the complexity of geopolitics.

#5

Israel Ceasefire

Israel and Hezbollah have agreed to a ceasefire, ending a 13-month war that has displaced over 1.2 million Lebanese and 60,000 Israelis and killed nearly 4,000 Lebanese civilians and fighters and over 100 Israelis. The agreement allows Israeli forces to remain in southern Lebanon for 60 days while the Lebanese army deploys additional troops to maintain the ceasefire. Both sides remain cautious, with Israel warning residents not to return to border areas and vowing to act firmly if provoked, while Hezbollah asserts its right to defend itself. The ceasefire aims to stabilize the Israeli-Lebanese border after extensive destruction and displacement, with tens of thousands of Lebanese and Israeli residents affected. Diplomatic focus now shifts to Gaza, where efforts to secure a ceasefire have yet to succeed. Meanwhile, international stakeholders, including Iran and the U.S., are watching developments closely, hoping for broader regional stability but acknowledging significant challenges ahead.

The truce, brokered by the U.S. and France, hinges on deploying the Lebanese Armed Forces as a buffer in southern Lebanon, but uncertainty remains regarding enforcement and long-term stability. The war significantly weakened Hezbollah, with Israel destroying much of its missile arsenal, leadership, and infrastructure through targeted strikes and intelligence operations. Despite this, Hezbollah, supported by Iran, may seek to rebuild its forces, heightening concerns of renewed conflict. Iran, facing setbacks from the war, may bolster its other proxies, such as the Houthis in Yemen, and could consider accelerating its nuclear program in response to losses. While the ceasefire provides hope for stability, displaced civilians on both sides remain cautious about returning to their homes, fearing renewed violence. The Lebanese Armed Forces, weaker than Hezbollah, face challenges in maintaining peace, and Israel may continue preemptive strikes on perceived threats, increasing the risk of escalation. The future depends on effective enforcement and whether both sides can avoid provocations

#6

Officials Warn of China Targeting Telecoms

Top U.S. telecom executives met with national security officials at the White House to address a major Chinese cyber-espionage campaign targeting senior political figures, including President-elect Donald Trump and other prominent Republicans and Democrats. The hackers infiltrated major telecom providers like AT&T, Verizon, and Lumen, enabling them to spy on phone calls and text messages, posing a significant national security threat. The hack, described as the "worst telecom hack in U.S. history" by Senator Mark Warner, remains under investigation, with fewer than 150 victims identified so far, primarily in Washington, D.C. However, the true scope of the breach is far greater, as the compromised records likely extend to numerous indirect contacts. China has denied involvement, but U.S. officials have long warned about China's extensive hacking program, which FBI Director Christopher Wray described as larger than those of all other major countries combined. Amid growing tensions over Taiwan, U.S. Cyber Command is conducting offensive and defensive operations to disrupt China's cyber activities, which are seen as a key element of its national strategy. This hacking campaign underscores the escalating cyber and national security challenges for corporations as they will become the targets of physical and cyber attacks over geopolitical concerns.

#7

Data Can Be Used to Track Soldiers and Spies

A joint investigation has revealed that location data collected from mobile devices is being used to track U.S. military personnel and operations overseas, posing significant national security risks. The data, sourced legally through the unregulated data broker industry, offers detailed insights into the daily routines of service members, including movements around highly sensitive sites in Germany, such as NSA facilities, U.S. airbases, and training centers for Ukrainian troops. Devices tied to individuals working on critical systems, likely contractors or employees with access to classified areas, have transmitted data from secure locations, including suspected NSA surveillance facilities and restricted weapons testing zones. Some devices were even tracked to off-base establishments, such as brothels, potentially exposing individuals to blackmail or other risks. This demonstrates how foreign governments or malicious actors could exploit this data to identify personnel with sensitive access, monitor nuclear weapon sites, or use compromising information for leverage. While this incident was about military personnel, corporations should be concerned that similar data collection and analysis could be used against them to steal intellectual property or harm executives. Businesses will need to incorporate such possibilities into their risk assessments and continuity plans.

#8

Walmart Reduces DEI Initiatives

Walmart announced plans to reduce some of its diversity, equity, and inclusion (DEI) initiatives, aligning with other companies responding to conservative pressure. The retailer will no longer consider race and gender when awarding supplier contracts or require demographic data for financing eligibility. It will also scale back racial equity training, discontinue participation in LGBTQ advocacy group rankings, and review its support for Pride events. The changes, confirmed by a Walmart spokesperson, follow similar moves by companies like Starbucks, JPMorgan Chase, and Ford. Conservative activist Robby Starbuck, who recently engaged with Walmart on DEI policies, disclosed these changes before Bloomberg's report on it. That matters because it shows corporations are responding to the changes in U.S. politics and that the population is increasingly opposed to DEI initiatives. Polarization plays an important role in consumer behavior, and corporations want to avoid what has happened to other companies that lost consumers when they openly sided with left-wing politics. Such reduction in DEI initiatives is likely to continue, but corporations who choose to maintain them will need to prepare for the political risks involved.