The Biggest Political Risks For Businesses In 2019: A Brief Overview

October 17, 2019

The Biggest Political Risks For Businesses In 2019: A Brief Overview | Niche Trade Credit Sydney

Trade wars, turbulent financial markets, and an ever-shifting political landscape have characterized most of 2019. While the global economy still seems to be strong and emerging economies continue to grow and contribute more to the economy, there are global risks that could threaten it in both the short-term and the long-term.

What are the biggest political risks for the global economy – and businesses – in 2019? In this article, we’ll take a look at a few top risk factors and potential issues for business throughout the world. Let’s get started now. 

Trade Wars Between China And The United States

President Donald Trump has shown an unwillingness to bend to trade deals with China’s President Xi Jinping, and this could mean the beginning of a prolonged trade war. If the United States begins as long-term trade war with China and tariffs and penalties continue to build, the global market and countries like Australia could be caught in the crossfire.

Unrest In The Middle East Affecting Oil Prices And Volatility

The low price of oil in the Middle East has pushed Middle Eastern politics back into the spotlight – and things like deteriorating US-Iran relations, airstrikes on Saudi oil fields, and the recent death of U.S.-based columnist Jamal Khashoggi in Saudi Arabia could all threaten to spike oil volatility. 

This, in turn, would have a major effect on global trade by raising the costs of transporting products throughout the entire supply chain, causing higher fuel costs for consumers (which could reduce spending) and more. 

A No-Deal Brexit For The United Kingdom

After replacing the controversial Theresa May, Prime Minister Boris Johnson of the United Kingdom has made his goal of an October 31 exit from the European Union a cornerstone of his policies – but a no-deal Brexit could be disastrous.

In a no-deal Brexit, the UK would leave the EU without any agreements about trade deals, tariffs, law enforcement… the list could go on. This would throw both the UK and EU into turmoil, and cost Britain more than 16 billion dollars. The economic ripple effects of a no-deal Brexit could go much further, and affect both all of the European Union – and the world.

Escalation Of Territorial Disputes In The South China Sea

Tensions between China and both the Philippines and Vietnam over the South China Sea have recently cooled. However, the South China Sea is home to more than 11 billion barrels of untapped oil and 190 trillion cubic feet of natural gas, according to the latest estimates.

Because of this, tensions over the sovereignty of the South China Sea could continue to increase in future years. Most political observers believe that there is a low likelihood of armed conflict. But in the rare event of an event like an armed China-Philippines conflict, the conflict could easily escalate to include other world superpowers like the United States.

Know What Factors May Affect Global Trade And Business In 2019 & Beyond!

Whether you’re in Australia, Oceania, or anywhere else in the world, these political risks could pose threats to your business. We recommend staying up-to-date with the latest news and updates, and keeping an eye on these situations as they continue to develop.

In addition, you can take steps like purchasing trade credit insurance or political risk insurance to protect your overseas interests. To learn more, just contact Niche Trade Credit now.  Call us today 02 9416 0670.

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