You can probably imagine how difficult it is to put together a special section on geopolitical risk when the leader of the free world is an unpredictable antagonist whose policies on sanctions and tariffs—and the responses from other leaders—seem to change virtually every day.
But that’s sort of our point, isn’t it?
If we at Compliance Week are challenged to keep up with it all, how can you be expected to evaluate the risk of doing business in certain countries, in specific industries, or with particular companies or materials when the rules you base key decisions on keep changing?
We live in interesting times, for sure, made even more remarkable by President Trump’s active foreign agenda, wherein today’s tweet is likely to be tomorrow’s game-changing policy directive. Consider the factors at play around the world:
The United States pulled out of the Iran nuclear deal and has not only reimposed sanctions against that regime, it has threatened “secondary sanctions” against any non-U.S. companies that want to continue to do business in Iran per the terms of the accord, which is still being upheld by the European Union. The EU is promising countermeasures, but some businesses have already indicated they’ll pull out of Iran in advance of the Aug. 6 deadline so as not to risk “snapback” measures from the United States. Messy.
The Trump administration has further irked its allies in the EU (not to mention Canada and Mexico) by imposing tariffs on aluminum and steel products, to which the EU responded with tariffs of their own.
Columnist Tom Fox even threw out the possibility that the EU could focus enforcement of new data privacy rules (GDPR) on U.S.-based technology companies as a way to hit the Americans where it hurts and force Trump to reconsider. Like we said: messy.
And then there’s the escalating trade war with China, which has already seen tariff salvos from the United States (on $50 billion of U.S. goods), the Chinese (matching Trump’s $50 billion), and Trump again (he has instructed the U.S. Trade Representative to find $200 billion worth of Chinese goods for additional tariffs).
And what about sanctions imposed against individual companies, such as Chinese telecom ZTE and state-owned Venezuelan oil company PdVSA? Rules against working with those companies will surely impact American companies and workers.
How do you make smart decisions for your organization with so much uncertainty? We talked to experts from both sides of the pond to try to get the best advice on both understanding and mitigating the unprecedented amount of geopolitical risk faced by businesses.
We hope you find a lot of useful strategies and best practices to bring to your board of directors from our special report. Best of luck out there; you’re going to need it.