Three-quarters of companies across the world are redesigning their supply chains by working with more suppliers to mitigate risks, a new study has revealed.
Presented by Economist Impact and DP World at the World Economic Forum, the fifth annual Trade in Transition study attributed this strategic shift to current geopolitical uncertainty due to the new US administration's 'America First' policies.
The study surveyed over 3,500 supply chain executives around the world and the results showed that companies are being forced to adapt quickly to rising protectionism and changing geopolitical alliances.
Non-Aligned Countries
Non-aligned states are rapidly becoming important mediators in mitigating climate risks and filling gaps created by global conflicts, according to the report.
Seventy-one percent of executives believe that these countries mitigate trade risks, while 69% see them as crucial in addressing gaps created by global conflicts.
Non-aligned countries, such as Vietnam, Mexico, India, the United Arab Emirates, and Brazil, are emerging as important trade hubs.
Sultan Ahmed bin Sulayem, chair and CEO of DP World Group, stated, "Global trade is now more complex than ever, requiring flexibility, resilience and innovation. DP World provides companies with the global infrastructure, local expertise, and advanced technology they need to succeed in this changing landscape of fragmented markets.
"Economist Impact's latest study offers valuable insights into the future of trade in this new era. We aim to foster dialogue, innovation and resilience within the global supply chain ecosystem, enabling companies to adapt and thrive in an increasingly dynamic world."
Other Findings
The survey revealed that around 40% of companies are increasing their sourcing in the US and another 32% are using dual supply chains to mitigate geopolitical risks.
Moving supply chains to politically like-minded countries, also known as 'friendshoring', is being implemented by approximately 34% of companies to manage tensions between global powers.
Close to a third (33%) of executives listed persistent inflation and high interest rates as their top concerns.
Companies believe that measures such as leveraging neutral hubs, diversifying suppliers, and adopting advanced technologies like AI would help them navigate economic and geopolitical complexity.
John Ferguson, global director of New Globalisation at Economist Impact, added, "In 2025 and for the foreseeable future, global trade will be shaped by three forces: geopolitical changes, climate change, and a new wave of AI and automation.
"Yet companies are not retreating from international trade; they are rising to the challenge. Companies that remain agile and cost-efficient will have an advantage. Companies that combine risk management with AI experimentation and openness will be best positioned to win in this new chapter of globalisation."
