Navigating a fragmented future: Implications of the 2024 US election on global business

G-Zero world

Where we find ourselves today is this: the US still holds the reins in military and financial power, but Trump seems uninterested in taking on a global leadership role. China, for its part, has cemented its dominance in manufacturing, but President Xi doesn’t seem all that concerned with stepping up to address global issues either. And Europe? It wants to lead, but without dominance in key areas, it’s an uphill battle. Europe is great at drafting strong regulations and hoping that the rest of the world will adopt them. The desire to lead is there, but the influence? Not as strong.

This brings us to what political analyst Ian Bremmer calls a “G-Zero world,” where no single country – or group of countries – can effectively tackle the global challenges we face. We’re heading into an era where no one seems ready to step up and establish order. Nor is anyone taking the lead on critical issues like climate change, AI regulation, global health, or conflict resolution. And that, frankly, has some serious implications for all of us.

So, what can we expect in a G-Zero world? With everything we know about Trump, we can expect to see a lot of deal-making. Copies of his 1987 book The Art of The Deal are no doubt being dusted off and re-read. Not only are leaders reading up on how to make deals with Trump, but some, like South Korea’s Yoon Suk Yeol, are even brushing up on their golf skills in preparation for future meetings with him.

One area that Trump will focus on heavily is tariffs, putting China, the EU, and Mexico at the highest risk. These are all the countries that the US is running trade deficits with, and he very much believes that if there is a trade deficit, it means the other countries are taking advantage of the US. Obviously, this is not how most economists would describe this situation, but this is how Trump thinks about this. And despite economist estimates that these tariffs would cost the average American family $2,600 in increased costs even when goods are assembled in the US, Trump will raise them.

But it is also important to bear in mind that the one thing Trump cares more about than anything else is his popularity. And if prices go up and this impacts his popularity or approval rating, this may just as easily go in another direction.

As my IMD colleague Simon Evenett has argued, certain sectors are more exposed than others, like toy or furniture manufacturing. Electrical machines, appliances, oil, and plastics are also vulnerable. In these sectors, the US imports more than $50bn annually and represents a large share of total global imports.

As you think about the future, I would encourage you to assess the importance of the US market to your organization and industry. How reliant are you on the US? And equally important, how many alternative markets are available to you? The global landscape is going to be dynamic. As some companies are effectively shut out of the US market, they’ll be forced to find new opportunities elsewhere. This will lead to increased competition in those markets.

The key takeaway here is that the US market may not be the only game in town anymore, and the ripple effects of these changes will likely be felt far beyond our borders. It’s important to think about how this will impact your business strategies, market positioning, and long-term planning.