The threat of conflict, rising protectionism, tariffs, and trade wars could seriously disrupt supply chains. Companies might struggle with accessing data centers and transferring data across borders due to these challenges.
As the World Economic Forum (WEF) gears up for its 2025 annual meeting, experts, business leaders, and politicians are bracing for an unpredictable couple of years. More than 60 global leaders and 1,600 business executives will gather in Davos, Switzerland next week to explore collaborative solutions to pressing world issues.
This year’s theme, “a call to collaboration in the intelligent age,” will feature voices like US president-elect Donald Trump, Ukraine’s Volodymyr Zelenskyy, European Commission president Ursula von der Leyen, and China’s vice-premier Ding Xuexiang. The UK’s chancellor, Rachel Reeves, is also set to join them.
The meeting comes at a time when Trump threatens tariffs on Canada and Mexico, plans to increase duties on Chinese goods, and may withdraw from the Paris climate agreement and the World Health Organization.
The WEF’s Global Risks Report 2025 highlights a fractured global landscape, with geopolitical tensions, social unrest, and technological challenges threatening stability. Carolina Klint from Marsh McLennan emphasizes that growing protectionism poses serious risks to fragile supply chains, which are already stretched thin.
As she notes, rising trade disputes have led to significant increases in tariffs and trade barriers worldwide. Many nations are competing for critical natural resources, essential for technology development and energy transitions.
Last year’s water shortages at the Panama Canal, severe flooding, regional conflicts, and port strikes pushed supply chains to their limits. Experts predict that 2025 will bring even more turbulence, with new tariffs and trade restrictions likely to exacerbate delays and costs for businesses, potentially leading to lost contracts.
Companies using just-in-time inventory systems could face significant setbacks, from delays in receiving parts to spikes in costs that affect product prices. As trade policy uncertainty looms, many companies may choose to delay investments and innovations.
Moving ahead, disruptions will impact both physical and digital supply chains. The WEF warns that the systems that support finance, electricity, and telecommunications are increasingly vulnerable to cyber attacks amid rising protectionism. Governments are tightening regulations and imposing restrictions on data flows, which heightens these concerns.
Klint points out that growing digital technology use has intensified public concern over privacy and surveillance. This could trigger new laws around data protection, leading businesses to navigate a complex maze of compliance requirements. Stricter regulations could hinder the adoption of innovative digital solutions.
Additionally, tariffs aimed at protecting domestic industries might spur cyber espionage against foreign competitors. Companies could also find themselves targeted by misinformation campaigns aimed at damaging their reputations.
Safeguarding digital assets and sensitive information is crucial in this fragmented economic landscape. Klint believes there’s an opportunity for tech leaders to collaborate with other company sectors and engage policymakers to revive trade agreements and foster collaboration. By doing so, they can help reduce the fragmentation and difficulties posed by economic protectionism.