How can business make sense of a world transformed?
24/03/2025Over the past year, political leadership across the world’s democracies has changed radically, with US President Donald Trump’s victory the most dramatic example — driving significant change, if not full-scale global realignment.
As in the US, voters fired elected officials across Europe (notably in the UK and Germany), as well as in Japan, Botswana and a slew of other countries where parties in power sustained heavy legislative losses in an anti-incumbent wave. Even when incumbents held on, as they did in India, they won with thinner support than the previous cycle and often with significant legislative losses that put their ability to enact their political agendas in question.
The global economic and security implications of the significant power shift underway across the world – and the implications for business – can’t be overstated. Here are five recurring themes affecting business:
1) Politics is driving markets: Though major equity markets brushed historic highs at the start of 2025, they retreated in early March, amidst unease about the impact on growth and inflation that a trade war might have. That is feeding through into jitteriness amongst business leaders, whose investment plans, supply chains and go-to-market strategies are subject to significant risk from political decisions in Washington.
2) Business must seek to understand how political dynamics are shifting: In our elections research paper last year, businesses across the world told us that serial shocks from Covid to Ukraine had led to more thorough assessment of exogenous and political risks in decision-making. In 2025, serious analysis and understanding of the external environment is more important than ever, so businesses can manage their relationships with governments and navigate international realignment on the economy, security and traditional cooperative international bodies for both.
3) Europe considers a new future: European leaders are coming to terms with how differently this US administration views the world. The possible end of the US’ commitment to the North Atlantic alliance (at least under this administration) is a seismic change, and its wavering support for Ukraine has Europe seeking solutions that don’t include the US. All this is likely to lead to increased defence spending and perhaps a push toward greater independence in foreign policy – sometimes described as ‘strategic autonomy’. On issues such as climate and DEI, Europe may also carve a distinctive path, with the US leadership having essentially abandoned both as priorities. This will mean global firms having to work harder to manage political relations on both sides of the Atlantic.
4) China endures: Through all this upheaval and uncertainty, the communist regime has continued to chug along, buoyed as Europe and the US spar and wars rage in Ukraine and the Middle East, and undaunted by Trump’s tariff hikes, hitting back immediately and aggressively. Businesses are warily watching the political implications, given that China is a major supplier for goods, and there’s no telling how this will all play out – and who will come out on top between the US and China, with Europe and other nations seemingly caught in the middle.
5) Is this the new normal? That’s the million – or, given the economic stakes – multi-trillion dollar – question. Will all these changes backfire when voters have another say? Or is this head-snapping reordering the new reality? With the US driving a lot of this change and electing a new Congress in the next 20 months, we may find out that, if Democrats win control, they could severely hamper Trump’s agenda in an election that’s likely to be a referendum on his first two years in office. And that, once again, could have ripple effects across countless countries and businesses.
Insight written by:
Liz Sidoti, Managing Director, Head of Public Affairs
H/Advisors Abernathy
John Rowland, Senior Partner
H/Advisors Cicero
john.rowland@h-advisors.global