Willis, a subsidiary of WTW, pointed out in its latest political risk index that in the new trade paradigm, geopolitical coordination is crucial to the risk management strategies of international companies.
The global trade landscape will be fundamentally reshaped in 2025, driven by a wave of new U.S. tariff agreements that prioritize national security over traditional free trade economies.
The report, titled “Mapping the New Geopolitics of Tariff Agreements,” believes that the era of “tariff geopolitics” has arrived. It details how the U.S. is increasingly requiring trading partners to align with its national security interests — particularly when it comes to export controls and supply chain security — or face punitive economic barriers.
The Willis report draws on research from Oxford Analytica to show that the 2025 tariff deal is effectively building a defensive “moat” around Western economies.
Entry into this exclusive trade zone now requires the fulfillment of strict conditions: the most common are export controls (included in 13 transactions), followed by supply chain security (10 transactions), enhanced rules of origin and transshipment monitoring.
The report warns that as these measures are implemented, common corporate strategies of simply rerouting supply chains to avoid tariffs will become increasingly difficult.
In addition, many agreements contain “poison pill” provisions that could result in signatories being abruptly expelled from the trading bloc if they fail to stay consistent.
Pressure to ensure favorable trade terms is forcing significant and sometimes surprising geopolitical adjustments around the world.
Vietnam, Cambodia and Ecuador have turned to the Western bloc, agreeing to enforce U.S. export controls to secure deal terms. After a political shift to the right, Argentina received a bailout and a unanimous partnership agreement.
The report pointed out that major economies such as Brazil, India and South Africa have not yet signed the agreement. It stressed that their future alliance remains uncertain, posing significant risks to foreign companies operating within its borders.
Contrary to concerns about a global trade war, the report found that retaliation against the 2025 tariffs will be limited. Although China and Canada have taken significant retaliatory measures, they remain the main actors.
Instead, many countries view tariffs from a “competition perspective.” In countries such as Brazil and Indonesia, initial diplomatic concerns were quickly replaced by a scramble for competitive advantage.
Governments are now seeking deals that would put their tariff rates slightly lower than those of regional rivals to attract export-oriented investment.
One area where the West seems to be losing ground is Africa. The report notes that the non-renewal of key trade preferences and reductions in U.S. aid are pushing many African countries to realign with Russia and other non-Western partners.
This shift has major strategic implications for companies adopting frontier market strategies, the report said.
“Companies are very good at adapting their supply chains to rapidly changing tariff rates,” said Sam Wilkin, director of political risk analysis at Willis. “But companies also need to manage the geopolitics of tariffs.”
“Our latest research highlights that tariffs can no longer be viewed as a compliance or operational issue, but need to be integrated into the core of strategic planning.”
