Political Risk Index: H2 2025

The H2 2025 edition of the Political Risk Index reveals a dramatic transformation in international trade. Tariffs have become the frontline of geopolitics, replacing the old rules-based order with a system that mirrors East-West divides. Countries once considered firm allies have drifted toward neutrality, while others have flipped camps entirely. These changes are now embedded in trade deals, tariff rates, and competitive positioning, making geopolitical alignment a critical factor for global businesses.

Tariffs and export controls reshape supply chains

For multinational companies, the cost of crossing geopolitical divides has never been higher. Tariffs and export controls now influence supply chains, market access, and investment decisions. Advanced technologies, critical minerals, and trans-shipment routes face new restrictions, and forecasting who will be inside or outside the tariff moat is essential for risk management and strategic planning.

Key insights from the H2 2025 Political Risk Index

This edition of the Index categorizes tariff deals into clear buckets, from sector-rate relief agreements for core U.S. allies to PTAAP (Potential Tariff Adjustments for Aligned Partners) deals that tie tariff reductions to national security alignment. It also highlights high-tariff cases where punitive rates are being used as leverage and explores the implications for emerging markets pursuing ‘multi-alignment’ strategies. Beyond tariffs, the Index examines how these deals incorporate broader geo-economic elements – such as supply chain security, export control alignment, and sanctions coordination – signaling a profound shift from the old rules-based order to a new, tariff-driven regime.

We hope the research and profiles in the Index will help you stay ahead of the curve and anticipate where opportunities and vulnerabilities lie. For further information on the Index or how to effectively manage your political risk, please contact our team.