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Three geopolitical scenarios that could impact your business in the years ahead

September 21, 2018

What scenario is most likely with tariff barriers and mid-term elections among many factors influencing global economics?

manufacturing plant

Based on a variety of economic indicators, the U.S. and global business outlook continues to exhibit strength. However, a number of developing geopolitical and macroeconomic factors indicate growing uncertainties, and perhaps even troubled waters, may lie ahead.

A report produced through a collaboration of the Atlantic Council, Ernst & Young and Zurich, “Borders vs Barriers: Navigating uncertainty in the U.S. business environment,” explores geopolitical trends and possible shock events that may result in major disruptions. The report identified three possible geopolitical scenarios and their potential impacts on U.S. and global organizations:

  • Internationalism, marked by continued globalism, the maintenance of free and open trade, and ongoing global cooperation.
  • Isolationism, suggesting growing protectionism, tightening economic restrictions, and a hardening of domestic focus in the U.S. and its trading partners.
  • Atlanticism, combining elements of both isolationism and internationalism, with a narrowing focus on relations between the U.S. and its Atlantic allies and trading partners.

Opinions abound regarding the potential effects on the scenarios discussed in the report. For example, modeling of the divergent impacts of the Internationalist and Isolationist scenarios suggests a potential difference of $2 trillion in cumulative U.S. GDP and 1.7 million U.S. jobs for the period 2017 to 2022. And while Q2 2018 U.S. GDP grew by 4.2 percent, the impacts of proposed tariffs have yet to be felt. The impending U.S. mid-term elections could also mean significant shifts in the U.S. business and political outlook.

While the future geopolitical environment may combine features drawn from all three scenarios discussed in the “Borders vs Barriers” report, it is more likely that one will emerge as the most pronounced.

For more information, be sure to download “Borders vs Barriers: Navigating uncertainty in the U.S. business environment.” In addition, please watch our video in which I discuss the potential impacts of all three scenarios.

Zurich neither endorses nor rejects the recommendations of the discussion presented. Further, the comments contained in this article are for general distribution and cannot apply to any single set of specific circumstances. If you have a legal issue to which you believe this article relates, we urge you to consult your own legal counsel.