India, Vietnam, Mexico, UAE, Brazil emerge as vital trade hubs

Three quarters of businesses worldwide are overhauling supply chains by working with MORE rather than LESS suppliers to mitigate risks in an increasingly fragmented global environment.

The fifth annual Trade in Transition study highlights this strategic pivot, driven by geopolitical uncertainty which is likely to grow with the America first policies of the new administration in the United States.

"The research unveiled by Economist Impact and DP World at the World Economic Forum surveyed over 3,500 supply chain executives across the world. The findings reveal firms are being forced to adapt at speed to rising protectionism and shifting geopolitical alliances."

Countries perceived to be non-aligned - Vietnam, Mexico, India, the UAE or Brazil - are emerging as vital trade hubs, the report added. A significant 71 percent of executives agree these countries mitigate trade risks while 69 percent view them as critical for addressing gaps created by global conflicts.

"Around 40 percent of firms are increasing their U.S.-based sourcing and a further 32 percent are adopting dual supply chains to mitigate against geopolitical risks. Friendshoring - relocating supply chains to politically aligned countries - complements these strategies, with about 34 percent of businesses pursuing this approach to navigate tensions between global powers."

Economic challenges remain a priority, with 33 percent of executives citing prolonged inflation and high interest rates as chief concerns.

“Global trade today is more complex than ever, demanding agility, resilience, and innovation," says Sultan Ahmed bin Sulayem, Group Chairman and CEO, DP World. "At DP World, we empower businesses with the global infrastructure, local expertise and advanced technology needed to thrive in this evolving landscape across fragmented markets. The latest research by Economist Impact provides invaluable insights into the future of trade in this new era. With it, we aim to foster dialogue, innovation, and resilience within the global supply chain ecosystem, empowering businesses to adapt and thrive in an increasingly dynamic world."

John Ferguson, Global Lead, New Globalisation, Economist Impact adds: "In 2025 and the foreseeable future, global trade will be shaped by three forces: shifting geopolitics, climate change and a new wave of AI and automation. Yet, businesses are not retreating from international trade but are stepping up to the challenge. Firms that stay agile and cost-efficient will have the edge. Firms that also combine risk management with AI experimentation and openness will be best placed to win in this new chapter of globalisation."

Ask supply chain officers about their favourite word, and resilience will be top of mind, the report added. "Companies are pursuing this through diversification and localisation, each of which come with trade-offs. Diversification spreads risk by sourcing across geographies but demands efficient execution to avoid ballooning costs. Localisation offers control and reduces transport bottlenecks but has high initial costs and can lead to overdependence on regional suppliers. Success lies in getting the balance between the two right.

"The world of trade in 2025 will be defined by difficult choices and competing priorities. Businesses must choose between diversification and localisation, and flexibility and control. Supply chain strategists must craft long-term visions that balance resilience with efficiency, while managers must execute those plans and navigate trade-offs. Firms that can unite ambition with practicality in making these choices will be best equipped to thrive amid constant disruption in the era of new globalisation."