- Executives must incorporate geopolitics into daily decision-making due to rising risks
- Rapidly changing tariffs and policy environment demand flexible sourcing strategies
- Resilience and government relations are key to managing global trade disruptions
For top executives trying to map out supply chains, plan capital expenditures, and evaluate market exposure, it seems like the list of geopolitical shocks just keeps growing longer. Surprise U.S. tariffs, conflicts involving Iran, new American tech restrictions, and Chinese export controls , all these factors are forcing boards to reconsider how they do things. Dominic Barton, a strategic advisor at Eurasia Group and chair of Rio Tinto, mentions that volatility isn’t just a minor issue anymore; it’s become a core element of corporate strategy.
In a chat with Fortune, shortly after President Donald Trump announced plans to impose a 50% tariff on some Canadian goods, Barton explained that the old assumptions supporting global trade and international institutions are falling apart. He argued that executives can’t just assume diplomacy will always smoothly sort out disputes anymore. In today’s world, he said, trade decisions are often influenced by social media as much as, or even more than, official channels , which makes the policy environment more unpredictable for companies trying to manage sourcing, logistics, or investment plans.
Axios reported on August 19 that Trump later delayed the Canadian tariffs by three days, giving both governments some time to negotiate a deal. That brief pause, though, actually highlights Barton’s main point , the policy landscape can change very swiftly, and that creates real consequences for manufacturers, exporters, and suppliers who rely on stable cross-border rules.
Barton brings quite a bit of international experience to the table. He spent years leading McKinsey’s Asia operations before serving as Canada’s ambassador to China. That background, he said, really influences his view that companies can’t keep treating geopolitical risk as just an occasional boardroom topic. In his opinion, the traditional approach of inviting a former government official for a dinner speech on international issues is no longer enough. Instead, CEOs need to develop deeper government relations capabilities and incorporate geopolitics into their daily decision-making , whether it's about balance sheets, debt levels, data management, or supply chain resilience.
His advice, especially for companies engaged in cross-border manufacturing, sourcing, and logistics, feels particularly urgent. Consultants and trade advisors have been pointing out that the Canadian tariffs are part of a broader U.S. push on trade. For instance, PwC indicated that Washington had already ordered an additional 10% duty on Canadian goods under a separate trade action linked to enforced labor standards, while firms like KPMG reported that the 50% tariffs targeted things like vehicles, alcohol, and dairy, though some exemptions existed for products like energy and potash.
The effect for suppliers? Well, it’s a more fragmented North American operating environment. Customs treatment can shift quickly, often layered on top of each other. Barton also mentions China’s shifting role in global industry as additional evidence that old sourcing assumptions need to be revisited. While Beijing still remains a strategic rival, he notes it has become a huge source of intellectual property and industrial equipment. For Rio Tinto, this has translated into buying more from Chinese suppliers , even when those options are pricier upfront , because the equipment tends to last longer and work better. This shift, he suggested, is another clear sign that resilience, not just cost, is becoming the key metric for multinational buyers.
Takeaways - Geopolitical risk is now a day-to-day business issue, not a periodic board discussion. - Tariffs and trade actions can change fast, so sourcing and logistics plans need flexibility. - Social media can shape policy outcomes, increasing uncertainty for mobile, electronics, and industrial supply chains. - Resilience may matter more than lowest price when evaluating suppliers and capital spending. - Stronger government relations and scenario planning can help firms navigate volatile markets.
Frequently Asked Questions Q: Why are executives paying so much attention to geopolitics now? A: Because tariffs, export controls, and conflicts can directly affect sourcing, logistics, and investment decisions.
Q: What is the main message from Barton’s comments? A: Companies should treat geopolitical volatility as a core strategic factor, not a side issue.
Q: How does this affect supply chains? A: It can raise costs, disrupt customs flows, and push firms to diversify suppliers and markets.
Disclaimer: This article may have been created with AI assistance and reviewed by our editorial team. It is provided for general informational purposes only. Readers should verify information independently before relying on this content.
Source Reference Map:
Inspired by the headline at: [1]
Sources by paragraph: - Paragraph 1: [1] - Paragraph 2: [1], [2] - Paragraph 3: [1], [2] - Paragraph 4: [1] - Paragraph 5: [2], [3], [4]
