Looking at the state of geopolitics in 2025
At the recent National Fluid Power Association’s Annual Conference in Tucson, brothers Alex and Eugene Chausovsky of the New Lines Institute for Strategy and Policy spoke about geopolitical disruption and what it can mean for manufacturers. They highlighted how today we have a multipolarity in the world, with global powers (the U.S. and China), global players (the EU and Russia), and regional swing players (think India, Japan, Turkey, Iran, Saudi Arabia, Mexico, and Brazil) that are influential in their respective neighborhoods. Additionally, we now also must contend with non-aligned and non-state actors — in today’s world, we have some companies that boast larger revenues than the GDPs of entire countries.
The other geopolitical theme that manufacturers must face in 2025 is connectivity. That involves trade (deglobalization, supply chain evolution, reshoring), technology (such as AI), energy/climate (with a lot of changes in the U.S., as well as massive weather events around the world), and internal polarization (such as what we’ve seen in the U.S. and other countries, with misinformation and alternative nontraditional parties).
Here are some of the brothers’ other thoughts for the coming years:
- Hotspots will continue to be the Ukraine-Russian war, the Middle East (Israel-Hamas), and potentially a U.S.-China Indo-Pacific conflict involving Taiwan and possibly South Korea, Japan, the Philippines, Vietnam, and Malaysia. There’s also always the chance of disease outbreaks and migration issues related to climate change.
- They see no change in the dollar remaining the global reserve currency anytime soon. However, they noted that “thinking that we’re going back to 2% inflation is a fool’s game.”
- The Trump Administration’s policy proposals will result in U.S. debt as a percentage of GDP rising above the current law’s 125% allowance by 2035 to roughly 143% (with a low-end figure of 129% and a high-end figure of 161%). They did note that most of the debt is not held by foreign countries but by savings bond holders, intragovernmental debt, mutual funds, the federal reserve system, etc.
- Businesses worried about tariffs can look into using the first sale rule, bonded warehouses, and temporary import bonds (TIB), as well as strategic sourcing, country of origin adjustments, and product exclusion requests.
Paul J. Heney – VP, Editorial Director
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Filed Under: DIGITAL ISSUES • DESIGN WORLD