In a wide-ranging conversation, Sam Palmisano, Chairman of the Center for Global Enterprise and former IBM Chairman and CEO, joins Nobel Laureate economist Mike Spence to examine how rising populism, shifting geopolitical dynamics, and the United States’ retreat from multilateral leadership are driving a fundamental realignment of global trade and supply chains. Together, they explore the challenges and opportunities facing businesses—particularly those headquartered in the U.S.—and highlight strategic considerations for investment, market access, supply chain operations, and innovation in this rapidly evolving environment.
Key Themes and Takeaways:
U.S. Economic Outlook
Confidence among U.S. consumers and CEOs is waning amid extensive geo-political volatility, inflationary concerns, and uncertainty of financial markets. Many businesses are preparing for potential trade disruptions, including stockpiling inventory in anticipation of supply chain instability. Uncertainty has become a disruptive force, with the potential to inflict real economic damage if trade negotiations continue to falter. Although the U.S. accounts for roughly 25% of global trade, it risks isolating itself as other economies maintain robust trade relationships.
Europe’s Mixed Signals
Investment into Europe is on the rise, often as a hedge against U.S. uncertainty. Structural reforms—particularly in defense and digital policy—offer promise, but Europe’s consensus-driven governance can hamper timely action. Economic growth prospects are cautiously positive, yet fragile, due to external dependencies and internal fragmentation.
China’s Strategic Transition
China is navigating a rare shortfall in aggregate demand, with weakened consumer spending and reduced private sector investment. The country is undergoing a structural shift, moving away from export- and investment-driven growth toward a model centered on domestic consumption and innovation. China’s expanding influence in Latin America and Europe underscores its repositioning as a central player in the next phase of global trade.
U.S. Retrenchment from Multilateralism
The United States appears to be stepping back from multilateral institutions such as the WTO, WHO, and IMF. While not embracing full isolationism, the U.S. is no longer leading efforts toward global cooperation, weakening the frameworks that have historically underpinned international trade. As a result, the global trade landscape is becoming more fragmented, trust-constrained, and shaped by national security considerations—though not entirely de-globalized.
Rise of the “75% Global Economy”
Even as the U.S. retreats, roughly 75% of the global economy—including China, Europe, and emerging markets—remains committed to globalization. These regions are forming new trade alliances and building alternative supply chain networks, reducing dependence on U.S. leadership.
Opportunities for Multinational Companies
Globally active companies can adapt by investing in high-growth markets with strong infrastructure and talent pipelines. U.S.-based multinationals may face increased regulatory complexity but can reduce risk through new supply chains frameworks, deploying new technologies, local joint ventures, and targeted foreign direct investment. Success will hinge on deeper local engagement, including workforce development and infrastructure expansion.
The U.S. as a “New Emerging Market”
Ironically, the U.S. is starting to resemble an emerging market due to increased protectionism and national security priorities (e.g., the CHIPS Act). Foreign companies seeking access may now need to invest in local manufacturing, R&D, and data infrastructure. This shift demands significant upgrades to U.S. supply chain capacity and workforce development, including closer partnerships with universities and training institutions.
Building a “Constellation of Value”
To navigate this new landscape, companies must forgo old linear approaches to supply chains. “Constellations of Value” supply chain management frameworks offer operational flexibility and market access, enabling rapid pivots in response to disruption. Such partnerships are essential to building resilience and agility across global operations.
Adapting to a Fragmented, Yet Interconnected World
De-globalization is not inevitable, but a strategic realignment of global trade is clearly underway. Businesses must be prepared to operate with greater regional agility, digital capability, and geopolitical awareness. The companies that thrive will be those that make early, forward-looking investments in resilience, local partnerships, and emerging technologies. Whether expanding in Latin America, adapting in Europe or China, or adjusting to the evolving U.S. trade environment, long-term success will depend on trust, adaptability, and sustained investment in talent and innovation.
Watch the full conversation between Sam Palmisano and Mike Spence to gain deeper insight into the forces reshaping global trade and what it means for the future of your supply chain.
Back to News and PressIn a wide-ranging conversation, Sam Palmisano, Chairman of the Center for Global Enterprise and former IBM Chairman and CEO, joins Nobel Laureate economist Mike Spence to examine how rising populism, shifting geopolitical dynamics, and the United States’ retreat from multilateral leadership are driving a fundamental realignment of global trade and supply chains. Together, they explore the challenges and opportunities facing businesses—particularly those headquartered in the U.S.—and highlight strategic considerations for investment, market access, supply chain operations, and innovation in this rapidly evolving environment.
Key Themes and Takeaways:
U.S. Economic Outlook
Confidence among U.S. consumers and CEOs is waning amid extensive geo-political volatility, inflationary concerns, and uncertainty of financial markets. Many businesses are preparing for potential trade disruptions, including stockpiling inventory in anticipation of supply chain instability. Uncertainty has become a disruptive force, with the potential to inflict real economic damage if trade negotiations continue to falter. Although the U.S. accounts for roughly 25% of global trade, it risks isolating itself as other economies maintain robust trade relationships.
Europe’s Mixed Signals
Investment into Europe is on the rise, often as a hedge against U.S. uncertainty. Structural reforms—particularly in defense and digital policy—offer promise, but Europe’s consensus-driven governance can hamper timely action. Economic growth prospects are cautiously positive, yet fragile, due to external dependencies and internal fragmentation.
China’s Strategic Transition
China is navigating a rare shortfall in aggregate demand, with weakened consumer spending and reduced private sector investment. The country is undergoing a structural shift, moving away from export- and investment-driven growth toward a model centered on domestic consumption and innovation. China’s expanding influence in Latin America and Europe underscores its repositioning as a central player in the next phase of global trade.
U.S. Retrenchment from Multilateralism
The United States appears to be stepping back from multilateral institutions such as the WTO, WHO, and IMF. While not embracing full isolationism, the U.S. is no longer leading efforts toward global cooperation, weakening the frameworks that have historically underpinned international trade. As a result, the global trade landscape is becoming more fragmented, trust-constrained, and shaped by national security considerations—though not entirely de-globalized.
Rise of the “75% Global Economy”
Even as the U.S. retreats, roughly 75% of the global economy—including China, Europe, and emerging markets—remains committed to globalization. These regions are forming new trade alliances and building alternative supply chain networks, reducing dependence on U.S. leadership.
Opportunities for Multinational Companies
Globally active companies can adapt by investing in high-growth markets with strong infrastructure and talent pipelines. U.S.-based multinationals may face increased regulatory complexity but can reduce risk through new supply chains frameworks, deploying new technologies, local joint ventures, and targeted foreign direct investment. Success will hinge on deeper local engagement, including workforce development and infrastructure expansion.
The U.S. as a “New Emerging Market”
Ironically, the U.S. is starting to resemble an emerging market due to increased protectionism and national security priorities (e.g., the CHIPS Act). Foreign companies seeking access may now need to invest in local manufacturing, R&D, and data infrastructure. This shift demands significant upgrades to U.S. supply chain capacity and workforce development, including closer partnerships with universities and training institutions.
Building a “Constellation of Value”
To navigate this new landscape, companies must forgo old linear approaches to supply chains. “Constellations of Value” supply chain management frameworks offer operational flexibility and market access, enabling rapid pivots in response to disruption. Such partnerships are essential to building resilience and agility across global operations.
Adapting to a Fragmented, Yet Interconnected World
De-globalization is not inevitable, but a strategic realignment of global trade is clearly underway. Businesses must be prepared to operate with greater regional agility, digital capability, and geopolitical awareness. The companies that thrive will be those that make early, forward-looking investments in resilience, local partnerships, and emerging technologies. Whether expanding in Latin America, adapting in Europe or China, or adjusting to the evolving U.S. trade environment, long-term success will depend on trust, adaptability, and sustained investment in talent and innovation.
Watch the full conversation between Sam Palmisano and Mike Spence to gain deeper insight into the forces reshaping global trade and what it means for the future of your supply chain.
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