Control Risks: US global role, red line geopolitics risks to international businesses in 2025

The international business landscape is facing significant uncertainties and risks in the coming year, as highlighted by the recently introduced Risk Map 2025 by Control Risks. The re-election of Donald Trump as U.S. President, changing global roles, investment landscapes, escalating global trade wars, and rising political violence are among the top five risks identified by the report. Oludamilare Adesola, Associate Director at Control Risks, provided valuable insights during a recent interview with CNBC Africa to discuss these critical issues. Dami emphasized that the polarization within United States politics, driven by differences between Republicans and Democrats, has hindered the enactment of crucial laws and impacted internal priorities such as interest rates, budgets, and foreign policy. The shift towards an 'America first' approach under the Trump administration, which is also evident in Biden's policies, signals a declining U.S. influence globally and a pushback from other governments against U.S. interference. The report also addresses the risk of redline geopolitics, which encompass physical conflicts in regions like the South China Sea, Middle East, and Russian-Ukraine war. These conflicts not only disrupt international business supply chains but also have local repercussions, as seen in the impact on wheat supply and bread prices. The escalation of geopolitical threats to mobilize soldiers on the ground poses a bolder and bloodier conflict scenario, further intensifying global risks. A concerning trend highlighted by Control Risks is the rising political violence and extremism witnessed in various regions, including Nigeria and ECOWAS countries. The resurgence of radicalization and the emergence of junta groups signify a regression from democratic governance, presenting challenges for businesses operating in volatile environments. The interconnected nature of global politics and violence underscores the need for businesses to mitigate potential risks. Moreover, the report delves into digital concentration risks, emphasizing the vulnerability of global digital infrastructure to damages and cyber attacks. The reliance on a few ecosystems for digital connectivity poses significant threats to businesses and economies, as demonstrated by disruptions caused by undersea cable damages in Nigeria earlier this year. Businesses must enhance their risk assessment protocols to address these evolving threats in the digital realm. As businesses navigate through the uncertainties of 2025, Dami stressed the importance of conducting comprehensive risk assessments to evaluate the probability and impact of potential risks. Differentiation in success for businesses lies in their ability to identify vulnerabilities and develop strategies to mitigate these risks effectively. While challenges persist in the face of geopolitical uncertainties and escalating conflicts, opportunities for trade and investment remain viable for businesses that adopt proactive risk management approaches. In conclusion, the insights provided by Control Risks highlight the complex and dynamic nature of global risks facing international businesses in 2025. By understanding these risks and implementing robust risk management strategies, businesses can navigate through turbulent times and capitalize on emerging opportunities in the evolving global landscape.