The world is immersed in a period of extreme uncertainty. We live through a full-blown crisis where anything may happen. Donald Trump’s rise to power has catalyzed significant geopolitical changes, with an administration that has disrupted global balances and driven a shift towards a multipolar world. This transformation has dismantled the old equilibrium in a worldwide free-market society. Trump has come with a clear intention to bury the World Trade Organization (WTO).
However, this crisis did not start with Trump. We anticipated it with the 2008 subprime crisis, the COVID-19 pandemic, and the war in Ukraine. Trump is not the only cause of global uncertainty. European businesses, in particular, have felt the impact of this new reality and now face fresh challenges, such as tariffs imposed by the United States, Europe, Canada, and China, along with market-shaking decisions.
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Impact on European Businesses
European companies, already navigating a world of constant uncertainty, are now confronted with an even more unpredictable scenario. The burdens imposed by the US, Europe, Canada, and China exemplify the new challenges they must address. These tariffs are likely to push global economies to the brink.
Given the context, European businesses must strengthen their risk anticipation capabilities and resilience. Preparing for crises is even more critical if you aspire to become a HARD company. That is, a company with anticipatory vision, rapid alert and response systems, the ability to absorb shocks quickly, and a sharp focus on recovery. Additionally, understanding the digital landscape of hyper-vulnerability is essential.
Risk Anticipation and Opportunities
In such an uncertain world, improvisation is a mistake. Companies must enhance their risk anticipation capabilities and resilience to become HARD enterprises. Risk anticipation is key to business survival and success in a turbulent environment. Therefore, companies must work on identifying risks, preparing internally to mitigate them, and seeking opportunities for development and growth. Because in chaotic situations like the current one, opportunities will emerge for those who can read the signs.
Strategic and Geopolitical Vision
HARD businesses must adopt a strategic and anticipatory vision of risks, focusing on systemic vulnerabilities. The companies need a clear perspective on geopolitical and economic risks. This strategic and anticipatory approach can help businesses mitigate risks and identify growth opportunities.
Consider, for instance, how the trade war could trigger a recession, fuel stagflation, impoverish the population, and strain supply chains—potentially leading to severe social tensions. Failing to anticipate this scenario, especially with Trump in the picture, means relying solely on reactivity and improvisation. If the looming crisis is severe, this approach will not end well.
Ethics and Sustainability
In this context, HARD businesses must maintain ethical and sustainable standards. Lacking a clear purpose or abandoning sustainability principles—something many companies, led by BlackRock, are doing—could result in reputational damage and loss of trust within the value chain. Taking this approach is likely to backfire in the medium term.
Companies should focus on sustainability and ethics to maintain stakeholder trust and enhance their competitiveness. I understand this will not be easy, especially given regulatory developments in the US. The Republicans have recently proposed the Protect USA Act, which seeks to prohibit entities integral to US national interests from complying with any foreign sustainability due diligence regulations, including the EU’s CSDDD or CS3D.
They argue that “US companies must be governed by US laws, not by unaccountable legislators in foreign capitals.” The implications could be significant for businesses and markets. Making value-based decisions in this context will be challenging. I insist: risk anticipation is vital.
Conclusion
In summary, risk anticipation in a world in crisis is the only way to increase the chances of business survival in such a turbulent scenario. Moreover, it is the best way to identify opportunities amid the crisis. Companies must strengthen their ability to anticipate risks, implement an anticipation and monitoring model, maintain a strategic and geopolitical vision, and uphold sustainability and ethical standards.
Only then can they survive and thrive in such an uncertain world. Only then will they cease to be a WEAK business.