Executive Summary - The World in 2025
Risk #1 | Rivalry and Unpredictability I: America driving turmoil
Donald Trump's return to the White House will bring more serious upheaval than his first term. Beyond that, it is almost impossible to predict policy actions of a president whose focus will be to push through his idea of American superpower, whatever the cost. Trade wars with China, the EU and America’s neighbors beckon, as well as aggressive protectionism, nationalism and unpredictable deal-making. At the same time, the United States faces major domestic problems: The national debt is huge, rising interest rates threaten the budget, and the likely effects of Trump’s aggressive protectionism on the American economy and the high costs of living make its implementation questionable and dangerous.
👉 Businesses must navigate a geopolitical environment characterized by high volatility, uncertainty, and the looming threats of increased trade barriers across their supply chains. Global companies will benefit from increasing their US presence in a geopolitical environment characterized by rising protectionism and uncertainty. Reducing the supply chain dependency of local US manufacturing on other countries, including NAFTA partners, will be essential.
Risk #2 | Rivalry and Unpredictability II: China waiting to respond
China is facing serious challenges in 2025: a sluggish economic outlook, a persistent real estate sector crisis, rising national debt, and high unemployment are set against an intensifying strategic rivalry with the US, including the trade war threat. President Xi Jinping´s wait-and-see approach to Trump´s unpredictability towards China adds uncertainty for the rest of the world, which would be affected by economic countermeasures. Already, Beijing is making efforts to ensure supremacy in strategically important industries and critical minerals and safeguard domestic stability by amplifying government control over society and economy.
👉 Adapting to a new world of exports controls, (counter-)sanctions and supply chain disruptions becomes key for firms to ensure business continuity across their global operations.
Risk #3 | The Power of Technology
In 2025, the dominance of Big Tech and disruptive technologies like Artificial Intelligence (AI), quantum computing, and clean tech will continue to radically reshape global markets, business models, and geopolitics. The rise of techno-nationalism, marked by President Trump’s coterie of tech moguls, will heighten risks of digital trade wars not only between the United States and China, but also across the Atlantic with the EU. Businesses face growing cybersecurity threats from the rapid advancement of offensive cyber capabilities through disruptive technologies, as well as key regulatory challenges, such as the implementation of the Data Act or key provisions of the AI Act, which come into force in 2025.
👉 Firms must strengthen...