Geopolitical Risks in Business

🇷🇺 Deep dive into the components of hybrid threats: the criminality +fear mix at the heart of the hybrid warfare waged against Europe 🇪🇺 By GLOBSEC & International Centre for Counter-Terrorism (2025). The report identifies a crime–terror–information nexus, where illicit networks, coercive tactics, and influence ops are deliberately intertwined. It highlights how important info ops are to bring in the “denial” element. Take aways : 🔹Russia’s hybrid operations increasingly rely on criminal structures to project power, generate instability & maintain deniability. 🔹 Integrated hybrid architecture The nexus is reflects a deliberate state design combining: – Organised crime (smuggling, money laundering, trafficking, contract killings); – Terrorist or paramilitary methods (sabotage, targeted violence, coercion); – Information operations (disinformation, intimidation, perception management). These vectors operate in parallel to overwhelm institutional defences and blur the boundary between internal security, intelligence, and defence domains. 🔹 Use of criminal intermediaries Criminal groups and illicit facilitators serve as proxies for covert action. They provide logistics, financing, or access, while enabling plausible deniability for the Russian state. This networked approach decentralises risk while preserving strategic control through Russian intelligence services. 🔹 Information and cognitive effects The information dimension functions as an amplifier for physical or financial disruption. Each operation is supported by a narrative layer — false attribution, manipulated leaks, coordinated online amplification — intended to create confusion and distrust in European publics and institutions. These techniques belong to the domain of cognitive warfare, seeking to degrade perception, cohesion, and decision-making rather than infrastructure. 🔹 Institutional stress and legal asymmetry European states face cross-domain operations that sit at the intersection of criminal law, counter-terrorism, and national security. Legal and institutional silos hinder coherent responses. Existing mechanisms for attribution, evidence collection, and prosecution are poorly adapted to state-directed hybrid criminality. ➡️ Soviet active measures tactics multiplied by 1️⃣ Tech acceleration – cybercrime, digital finance, social platforms amplifying reach and speed. 2️⃣ Systemic integration – criminal, informational& coercive tools coordinated under a single strategic logic. 3️⃣ Expanded targeting – Europe is engaged across multiple vectors simultaneously: financial, informational, and cognitive. Russia’s crime–terror nexus is not a parallel phenomenon but a core component of state strategy, designed to exploit Europe’s openness, legal fragmentation, and trust-based institutions. ➡️persistent, low-visibility confrontation below the threshold of war.

Last week, China barred its major tech companies from buying Nvidia chips. This move received only modest attention in the media, but has implications beyond what’s widely appreciated. Specifically, it signals that China has progressed sufficiently in semiconductors to break away from dependence on advanced chips designed in the U.S., the vast majority of which are manufactured in Taiwan. It also highlights the U.S. vulnerability to possible disruptions in Taiwan at a moment when China is becoming less vulnerable. After the U.S. started restricting AI chip sales to China, China dramatically ramped up its semiconductor research and investment to move toward self-sufficiency. These efforts are starting to bear fruit, and China’s willingness to cut off Nvidia is a strong sign of its faith in its domestic capabilities. For example, the new DeepSeek-R1-Safe model was trained on 1000 Huawei Ascend chips. While individual Ascend chips are significantly less powerful than individual Nvidia or AMD chips, Huawei’s system-level design to orchestrate how a much larger number of chips work together seems to be paying off. For example, Huawei’s CloudMatrix 384 system of 384 chips aims to compete with Nvidia’s GB200, which uses 72 higher-capability chips. Today, U.S. access to advanced semiconductors is heavily dependent on Taiwan’s TSMC, which manufactures the vast majority of advanced chips. Unfortunately, U.S. efforts to ramp up domestic semiconductor manufacturing have been slow. I am encouraged that one fab at the TSMC Arizona facility is operating, but issues of workforce training, culture, licensing and permitting, and the supply chain are still being addressed, and there is still a long road ahead for the U.S. facility to be a viable substitute for Taiwan manufacturing. If China gains independence from Taiwan manufacturing significantly faster than the U.S., this would leave the U.S. much more vulnerable to possible disruptions in Taiwan, whether through natural disasters or man-made events. If manufacturing in Taiwan is disrupted for any reason and Chinese companies end up accounting for a large fraction of global semiconductor manufacturing capabilities, that would also help China gain tremendous geopolitical influence. Despite occasional moments of heightened tensions and large-scale military exercises, Taiwan has been mostly peaceful since the 1960s. This peace has helped the people of Taiwan to prosper and allowed AI to make tremendous advances, built on top of chips made by TSMC. I hope we will find a path to maintaining peace for many decades more. But hope is not a plan. In addition to working to ensure peace, practical work lies ahead to multi-source, build more fabs in more nations, and enhance the resilience of the semiconductor supply chain. Dependence on any single manufacturer invites shortages, price spikes, and stalled innovation the moment something goes sideways. [Original text: https://lnkd.in/gxR48TK8 ]

Amid rising tariffs and shifting geopolitics, the foundations of the rules-based global economy are being redefined. With the US policy shifts, the uncertainty is real. In fact, I just got back from New York, where I met with a number of CEOs – and for the first time, all of them said the same three words: “I don’t know.” It’s clear we’re not going back to “business as usual”. That’s why we felt it was crucial to bring our clients together today to hear from Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong at a closed-door conversation. He’s just been appointed Chairman of the new Singapore Economic Resilience Taskforce, and his perspectives were insightful, as he also listened to the concerns and questions our clients brought to the table. Looking ahead, I believe we’re in for more short-term volatility and uncertainty. My advice to clients: lock in good rates, manage your FX exposure, and address any supply chain constraints. Longer term, we need to think about the new world order more strategically. There are four key areas businesses need to focus on: • Supply Chain – Diversify sources and build in resilience • Logistics – Plan for the possibility of longer routes and ensure continuity • Financial and Payments – Prepare for alternatives beyond USD • Technology – Be ready for dual tech ecosystems and interoperability costs The silver lining is that we are in Singapore. While Asia does bear the brunt of tariffs, it is also home to 18 of the 20 fastest-growing trade corridors. Also, even though we have had slowdowns in our neighbourhood, we are still surrounded by big economies – China, India and Indonesia. Over the years, we’ve walked alongside our clients through many turning points, and we’ll keep showing up, especially when things get tough. Whether it’s navigating treasury decisions, managing volatility, or adapting supply chains. Storms may come, but like Singapore, we’ll stay steady – anchored, open, and here for the long haul.

The latest reporting from the Financial Times highlights a point that energy analysts have been making for years: geopolitical shocks consistently strengthen the case for renewables, electrification and storage. Microsoft’s global vice-president for energy notes that oil and gas price spikes linked to the Middle East conflict reinforce the value of wind, solar and batteries in providing price stability. Once installed, renewables offer predictable cost profiles and reduce exposure to volatile global fuel markets. We saw this dynamic after Russia’s invasion of Ukraine. Europe accelerated solar deployment, heat pump uptake increased in several countries, and governments revisited questions of energy security through the lens of diversification and electrification. The underlying issue remains unchanged. Fossil fuels must continuously flow through complex global supply chains. When those flows are disrupted, prices spike and economies are exposed. Renewables, by contrast, are capital intensive upfront but deliver long term domestic supply and insulation from commodity shocks. There are short term risks. Inflation, higher interest rates and supply chain constraints can slow clean energy investment. Some governments may also respond by doubling down on gas infrastructure. The policy challenge is to avoid locking in further structural vulnerability. Energy security and climate policy are not competing objectives. In a world of recurrent geopolitical instability, they are increasingly aligned.

During my time serving in government, I saw firsthand how geopolitics can impact energy production and flows, with cascading impacts on market and macroeconomic trends.   We're already seeing this play out following the last few days in the Middle East. U.S. and Israeli strikes on Iran triggered retaliatory action across the region that has disrupted energy production and transit.   The market reaction is changing quickly. Since I recorded this video on Monday, oil and gas prices have jumped further, and equities have shifted toward a risk-off move as investors price in continued escalation. Bonds sold off further, reflecting inflation fears in developed markets. Due to the segmented nature of natural gas markets, the impact of higher prices will hit regions differently, with Europe more exposed than the U.S. to elevated LNG prices.   The central question: will this remain a short-term volatility spike or evolve into a broader supply shock? The duration of the disruption and the severity of transit impacts are the core variables I'm watching.   ⬇️ Watch the full video for my latest take on what this could mean for markets.

The Trump Administration is clearly directing tariff efforts towards isolating China (e.g., with 10% tariffs on Vietnam versus 145% tariffs on China). This raises the question: how effective will this strategy be? Apart from the fact that our top import categories from China will be very challenging to quickly move at scale (e.g., laptops, cell phones, and especially lithium ion batteries for EVs [likely why the first two are now exempt]), it's important to understand that China has been termed the "OPEC of intermediate inputs" per this paper by Richard Baldwin and colleagues (https://lnkd.in/gad-AFmD). One table produced from that study. Thoughts: •This table shows the direct and indirect exposure (what the authors call "look-through" exposure) of each U.S. manufacturing industry (column) to each country (row). Indirect exposure occurs if China exports something like electrical wires to Mexico for assembly in a wire harness that is exported to the USA for final assembly in a finished vehicle. These data come from the global input-output accounts. We see that for every manufacturing sector, China is the largest source of look-through exposure because of its dominance in producing intermediate inputs. •Now translate this idea over to the current tariff situation. China will still dominate production of those intermediates, with more final assembly of goods going to the USA likely shifting to other Asian countries (Vietnam, Laos, Cambodia, Thailand, India) or Mexico. This means that any decoupling from China on a trade in value added basis (TiVA) will be less pronounced that standard trade statistics would suggest. See Johnson (2014; https://lnkd.in/gRKXTEmr) for a discussion of trade in value added, as well as the BEA (https://lnkd.in/eY9J9uQq) •Importantly (and something that gets lost), most of the goods needed for U.S. manufacturing come from the USA (last row of the table). Implication: try as the Trump Administration wants, it will not be able to decouple the USA from China. The question now is how much diversion will occur given companies have never had a greater incentive to try and export Chinese goods through other countries to take advantage of lower tariff rates. CBP will be quite busy to say the least. #supplychain #markets #economics #freight #shipsandshipping

The news from Venezuela this morning is a reminder that reserves are not supply. Early reports suggest oil facilities remain intact. That removes the worst-case scenario, but does not determine whether barrels will actually move. Oil flows on control, logistics, payments, insurance, and confidence in the system surrounding production and exports. When those break down, barrels remain stranded no matter how large the resource base. Venezuela holds the world’s largest proven oil reserves, yet it produces only about one million barrels per day (the US produces over 13M barrels per day). The constraint has never been geology. It has been governance, sanctions, capital access, and execution. If political change brings rapid stabilization and credible authority over PDVSA, the upside is incremental supply over time, not a sudden surge. Heavy oil requires diluent, maintenance, skilled labor, and sustained investment, all of which take time. If control fragments instead, the outcome is higher geopolitical risk premiums and continued tightness in heavy sour crude markets. This event may also test OPEC. Venezuela has long operated outside effective quota discipline due to capacity constraints. If barrels return meaningfully, the group will face difficult choices about accommodation, offsetting cuts, and credibility in a market that is already well supplied. Russia’s role also bears watching. Moscow has been a consistent political and commercial backer of Caracas, even as its own energy revenues face pressure. Venezuela therefore remains both an oil variable and a geopolitical pressure point. The real issues are not how much oil sits underground. They are who controls the system, how quickly exports can be stabilized, and whether any potential increase in supply can be sustained. These are judgments with real consequences. It is an extraordinary moment for the global energy industry.

Kenya’s avocado exporters are learning the hard way, Logistics isn't just a cost center. It's a make-or-break factor. With the Red Sea route no longer safe, ships are rerouting around the Cape of Good Hope. That one change has triggered a chain reaction: 🔄 Transit times have nearly doubled What took 22 days to Europe now takes 40+ and avocados aren’t built for that kind of delay. 💰 Transport costs have spiked Freight rates are up. Surcharges are in play. And every extra day in transit is driving up the final price per kilo. ❌ Fruit quality is compromised Even with Controlled Atmosphere containers, We’re seeing more claims, more rejections, and shrinking profit margins. So, the real question is no longer “How do we make up for these losses?” It’s: “How fast can we pivot?” Here’s where exporters must look next: ➡️ Shorter, faster markets – The Gulf. North Africa. Southern Africa. Less transit time. Less risk. More predictability. ➡️Processed products – Pulp, frozen avocado, oil. Stable shelf life. Higher margins. No race against ripening. ➡️Cold chain efficiency – From packhouse to port, every hour matters. Infrastructure is no longer a ‘nice-to-have.’ The Red Sea disruption won’t be the last. But it should be the loudest wake-up call yet. If we keep relying on one route, one product, and one market, we're not exporting. We're gambling. PS: Are we ready to pivot?

Intelligence agencies and the FBI, DOJ and CISA have revealed that unit 29155 of Russia’s GRU—a unit responsible for coup attempts, assassinations, and bombings—is now engaged in brazen hacking operations with targets across the world, including in Ukraine and the US. A broad group of Western government agencies from countries including the US, the UK, Ukraine, Australia, Canada, and five European countries on Thursday revealed that a hacker group that has launched multiple hacking operations targeting Ukraine, the US, and other countries in Europe, Asia, and Latin America is in fact part of the GRU's Unit 29155, the division of the spy agency known for its brazen acts of physical sabotage and politically motivated murder. That unit has been tied in the past, for instance, to the attempted poisoning of GRU defector Sergei Skripal with the Novichok nerve agent in the UK, which led to the death of two bystanders, as well as another assassination plot in Bulgaria, the explosion of an arms depot in the Czech Republic, and a failed coup attempt in Montenegro. Now that infamous section of the GRU appears to have developed its own active team of cyber warfare operators. Since 2022, GRU Unit 29155's more recently recruited hackers have taken the lead on cyber operations, including with the data-destroying wiper malware known as Whispergate, which hit at least two dozen Ukrainian organizations on the eve of Russia's February 2022 invasion, as well as the defacement of Ukrainian government websites and the theft and leak of information from them under a fake “hacktivist” persona known as Free Civilian. "Special forces don’t normally set up a cyber unit that mirrors their physical activities,” one official tells WIRED. “This is a heavily physical operating unit, tasked with the more gruesome acts that the GRU is involved. I find it very surprising that this unit that does very hands-on stuff is now doing cyber things from behind a keyboard.” https://lnkd.in/ehvpRzeJ

🇺🇦 Innovation Under Fire What’s happening off the coast of Ukraine should make every Western defence planner sit up. Ukrainian naval drones didn’t just adapt to a threat, they actually changed the behaviour of the enemy. Russian helicopters were once a critical counter to Ukraine’s maritime drones. They hunted them, disrupted them and controlled the battlespace. So Ukraine did something deceptively simple and strategically profound. They armed the drones with surface-to-air missiles. Result? Russian helicopters now avoid them entirely, recognising they’ve become easy targets. The so what? This isn’t about a new platform. It’s about innovation velocity beating legacy doctrine. Why this matters for future military strategy 👉 Drones are no longer disposable. These naval drones aren’t just ISR or kamikaze assets, they are multi-role, survivable, decision-shaping systems. Once a drone can credibly threaten manned aircraft, the cost-exchange ratio collapses in its favour. 👉 Behavioural deterrence beats attrition. Ukraine didn’t need to destroy every helicopter. It only needed to change Russian risk calculus. The real win wasn’t the kill, it was forcing the enemy to withdraw capability. 👉 Cross-domain convergence is the future. Sea platforms threatening air assets. Small systems dictating big-platform behaviour. This is the erosion of traditional domain boundaries, and it’s accelerating. 👉 Speed outperforms scale. This wasn’t a decade-long procurement programme. It was rapid iteration at the tactical edge, driven by operators, not committees. The side that learns fastest now wins first. 👉 Western militaries should be uncomfortable. If low-cost drones can deny helicopters today, what denies, • Amphibious landings tomorrow? • Carrier air operations next? • Littoral resupply routes in NATO theatres? Ukraine is stress-testing the future of warfare in real time, while much of the West is still debating requirements documents. This is innovation born of necessity, but it’s also a warning. The next military advantage won’t come from the biggest platforms or the longest programmes. It will come from, Fast thinkers, Fast builders and Fast learners. Those who ignore that lesson will find their helicopters and doctrines grounded. As ever, this isn’t doctrine, It’s a debate, and debate is how innovation starts. https://lnkd.in/eDBSstQ6 #Gwilly #DefenceInnovation #FutureWarfare #Drones #MilitaryStrategy #Ukraine #InnovationUnderFire