Geopolitical alignment rises up boardroom agenda as US tariff deals redraw trade map

A wave of US‑led tariff agreements in 2025 has shifted the international trade landscape and made geopolitical alignment a core commercial risk for globally exposed firms, according to a new Political Risk Index from Willis, part of WTW.

The report, Mapping the new geopolitics of tariff deals, draws on Oxford Analytica country expertise and a series of maps to show how recent agreements increasingly condition market access on alignment with US national security priorities. Willis says the new trade paradigm will force companies and insurers to treat tariffs as strategic, not just operational, hazards.

Key findings

Willis highlights several consequences for multinationals and those that insure them:

 

• Tariff deals are creating a Western “moat” that links market access to national security alignment. Many agreements require signatories to adopt US positions on export controls (present in 13 deals), supply‑chain security (10 deals), and tighter rules of origin and trans‑shipment monitoring. Willis notes these measures will take time to implement but could make simple supply‑chain rerouting increasingly difficult.
• East‑West competition is becoming more explicit. The 2025 deals have produced notable realignments: Vietnam, Cambodia and Ecuador have moved closer to the Western bloc by agreeing to enforce US export controls; Argentina secured a bailout with a politically aligned partner; meanwhile major emerging economies such as Brazil, India and South Africa have not signed deals, leaving their future alignment – and the operating environment for foreign firms—uncertain.
• “Poison pill” clauses in some agreements create the risk that signatories may suddenly lose preferential terms if political conditions change.
• Retaliation has so far been limited: Willis reports only China and Canada have mounted significant responses to the 2025 tariffs to date.
• Many countries are responding competitively to tariff pressures by trying to secure lower tariff rates than regional rivals, a dynamic that may shift investment flows and alter export‑orientation decisions.
• The West’s influence in parts of Africa appears to be waning in the wake of reduced trade preferences and cuts to aid, with several countries moving closer to Russia and other non‑Western partners – an outcome with implications for firms exposed to frontier markets.

Why it matters for insurers, brokers and risk managers

Willis frames tariffs as a strategic risk requiring integration into board‑level planning rather than an operational compliance item. For insurers and brokers, the report underlines multiple, tangible business impacts:

• Political‑risk and trade‑credit underwriting will need to factor alignment‑related exposure, including the possibility of rapid changes to market access or retroactive measures tied to “poison pill” clauses.
• Marine and supply‑chain insurers should expect increasing complexity in risk aggregation modelling as firms seek alternative routes or suppliers in jurisdictions with uncertain alignment.
• Trade credit and political‑risk capacity providers may reassess appetite for markets where alignment is unresolved or where retaliatory measures are active.
• Captive programmes and structured risk transfers could be used more widely by corporates seeking protection against sudden policy shifts that affect trade terms.
• Brokers and risk advisers will be asked to broaden advice beyond tariff rates to include scenario planning for geostrategic realignment and supply‑chain resilience.

Willis’ view and market takeaway

Sam Wilkin, director of political risk analytics at Willis, said the research shows firms have adapted well to tariff rate volatility but now need to manage the geopolitics of tariffs: “Companies have been astonishingly adept at adjusting their supply chains to fast‑changing tariff rates. But companies also need to manage the geopolitics of tariffs. Our latest research highlights how tariffs can no longer be treated as a compliance or operational issue but need to be embedded at the core of strategic planning.”

What risk teams should do now:

• Reassess country‑level exposure maps to include alignment‑based restrictions and poison‑pill risks.
• Stress‑test supply chains for scenarios in which key partners lose preferential access or face sudden compliance costs.
• Review insurance programmes (trade credit, political risk, marine, supply‑chain) for coverage gaps related to geopolitical realignment.
• Consider strategic use of captives or parametric instruments to cover tail risks from abrupt trade policy changes.
• Work with brokers to develop market‑specific mitigation plans that combine insurance and non‑insurance measures (diversified sourcing, inventory buffers, contractual protections).

The Willis index frames 2025 as a turning point in which trade policy and national security considerations have become intertwined. Tariff geopolitics must now be incorporated into strategic risk frameworks, underwriting models and client advisory work.