As world leaders gather in Davos, CEOs face the realities of this geo-economic fragmentation – where strengthinefficiency, define the competitor.

The new normal: geopolitics and growth are inseparable

As the World Economic Forum begins on January 19 2026, the message for global business is simple: the old playbook no longer applies. Geopolitics and trade have become inseparable, with sanctions, tariffs, and export controls shaping market access as much as consumer demand. In this environment, risk management is not a back-office function; it is a board-level strategic directive.

WEF’s theme “A Spirit of Dialogue” is organized around five imperatives: working together in a contested world; opening growth; investing in people; deploying innovation responsibly; and building prosperity within the boundaries of the planet. That framing mirrors how executives feel about their P&L and risk registers: trade, regulation, technology, and climate converge into an operating system for corporate strategy.

Trade is fragmenting, but competition for growth is intensifying

Davos 2026 will focus on one key question: how to achieve development in an era defined by fragmentation and shifting norms.

Recent signs capture the two-speed reality. The WTO’s 2025 outlook warns of turmoil: tariff increases and policy uncertainty cloud the near-term horizon, with scenarios ranging from a fractional decline in trade to a moderate recovery.

However, paradoxically, UNCTAD reports global trade values ​​reaching a record $35 trillion by 2025, driven by East Asia and South-South corridors. This is not the collapse of globalization but its reversal. Commerce is adaptation, not retreat; shift to regional clusters and politically aligned bilateral partners.

McKinsey’s latest analysis reveals the underlying architecture: trade tilts toward proximity and trust. US flows favor Mexico and Vietnam; Europe continues to distance itself from Russia; ASEAN, India, and Brazil are weaving cross-bloc ties. These standards indicate that growth remains achievable – but through different channels and under different rules, where stability and strategic alignment are as important as efficiency.

Sanctions and tariffs combine on a regulatory front dictated by national security

In line with this prior shift, boards can no longer treat sanctions, export controls, tariffs and trade defense as discrete issues. Regulators themselves are coordinating more closely than at any time in recent memory and this convergence is blurring the traditional boundaries between trade compliance and geopolitical risk management, creating a complex environment where businesses must navigate overlapping restrictions.

2025 – 26 brings tighter scrutiny by the US and EU on advanced technologies, China moving towards tighter customs and export controls on strategic resources, increasing controls on inbound and outbound investments, and continued pressure tied to Russia, Iran, and China. At the same time, tariffs have moved from a secondary tool to a main driver of trade results – suppressing volumes and forcing companies to prioritize the loading of cargo or change channels, as seen in the first half of 2025 where cross-border trade figures show companies prioritizing the loading of imports ahead of the expected impact of rising tariffs. Tariff adjustments can lead to exposure to sanctions, and vice versa. The result is an integrated, high-stakes framework where proactive monitoring and strategic vision are essential to maintaining competitiveness and avoiding costly disruptions.

Supply chains: resilience with quantifiable risk

In addition, it is expected that 2026 will increase the strength of the supply-chain from a defensive measure to a core growth lever. Resilience today emphasizes agility, market access, and investor confidence in a world where disruption is structural, not cyclical. As such, industry analysts point to three accompanying pressures: geopolitical intervention, regulatory complexity – including cross-jurisdictional human rights and due diligence regimes – and climate-driven shocks. Combined, these trends make resilience a strategic differentiator: companies that invest in adaptive, compliant, and transparent supply chains can not only reduce risk but unlock lasting performance gains.

CEOs need a new resilience playbook

Many companies are not yet equipped for combined legal-operational-geopolitical risks. Here’s a pragmatic, board-level playbook we’ve seen high performers adopt:

• It starts with building the right team and equipping them for a world where traditional silos are no longer enough: stability requires cross-functional collaboration. The Davos 2026 imperative to invest in people reflects this need to equip teams with cross-disciplinary expertise: Legal teams need to understand geopolitical risk; compliance officers need competence in penalty regimes; procurement specialists must be proficient in export controls and ESG dynamics; and teams must prepare for cyber threats. And the C-Suite must have oversight of all of this.

• Second, the culture of operational continuity is the heartbeat of resilience, and it thrives on adaptability. In a world where global shocks and policy rifts disrupt supply chains, digital systems, and workforce stability, organizations that place sustainability in their culture stand out. This means considering the strategic delay in carrying out critical processes, requiring strict risk assessment and the agility to adjust plans quickly through established management frameworks as conditions change – whether due to market volatility, geopolitical tensions, or unexpected operational challenges. For leading businesses, sustainability is an asset – one that ensures not only operational stability but also adaptability to compliance, and preserve trust, maintain performance, and make the unpredictable an expected and manageable consistency.

• Third, a strong internal compliance program (ICP) is essential – not as a static checklist, but as a living framework that evolves with geopolitical and regulatory shifts. This means continuous monitoring of sanctions, export controls, and trade restrictions, paired with clear channels of communication among legal, procurement, and operations teams. A strong ICP should anticipate risk rather than simply react: scenario planning, early warning systems, and regular cross-functional briefings help organizations keep pace with sudden policy changes. Embedding compliance in strategic decision-making ensures that resilience is not an afterthought but a core business capability, and one designed to grease, rather than gum up, the wheels of productivity.

• Finally, documentation, although often overlooked, is the cornerstone of accountability. CEOs must ensure that documentation is not considered a formality but as a strategic tool: it creates internal accountability, demonstrates diligence to regulators, and serves as the first line of defense in audits or investigations.

In a fragmented global environment and an era of uncertainty, disciplined preparation is the most reliable shield and most effective weapon.

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