How to navigate heightened geopolitical uncertainty

CFOs might feel like they’re navigating a riskier and more unpredictable geopolitical landscape than a year ago. They’re not imagining it. World leaders are signaling a fundamental shift in the international order, with US military intervention in Venezuela and President Donald Trump’s fixation on taking Greenland serving as very loud exclamation points.

Geopolitical risks can become big financial burdens, as they can bite into revenues or increase the costs of doing business. Finding ways to be nimble in adapting to the changing international order will be a must in 2026, experts told CFO Brew.

The shift. They describe the shift as a move away from a rules-based order—a system of international laws and agreements, overseen by cooperative institutions—to one defined by nations’ struggles for power and influence.

Canadian Prime Minister Mark Carney, speaking recently at the World Economic Forum in Davos, Switzerland, put the situation this way: “It seems that every day we’re reminded that we live in an era of great power rivalry, that the rules-based order is fading, that the strong can do what they can and the weak must suffer what they must.”

Events in Venezuela shows the Trump administration “very clearly doesn’t care about the international rules,” and its pressure campaign to wrest control of Greenland “immediately injects a very high degree of uncertainty…about what may be next,” Henry Wilkinson, chief intelligence officer at geopolitical and security intelligence service Dragonfly, told CFO Brew.

In a recent report, Dragonfly analysts observed a global shift toward “a fluid order defined by overlapping and often competing interests, dependencies, and contestation.”

Chaos has a cost. A volatile geopolitical environment creates a lot of what’s likely one of CFOs’ least-favorite words: uncertainty. Potential costs from geopolitical uncertainty take the form of supply chain disruptions, newfound regulatory burdens, and the additional time and money spent on mitigating evolving risks, according to Wilkinson.

“In today’s volatile global environment, geopolitical upheaval has emerged as a defining threat to supply chain resilience,” logistics company DP World noted in a survey released on Nov. 4. More than four-fifths of the 152 senior business leaders surveyed said geopolitical events posed “a moderate to significant risk to their supply chains.”

During times of heightened uncertainty, businesses may also hold off on investment and hiring decisions. Goldman Sachs researchers noted last April that rising uncertainty tied to Trump administration fiscal, tariff, and immigration policies “implies a roughly five [percentage point] drag on investment growth.” The researchers also estimated that uncertainty creates a “drag on monthly employment growth” of roughly 20,000 jobs.

Organizations are particularly concerned about the geopolitical impacts of tariffs. Two-thirds (65%) of respondents in the DP World survey indicated tariffs would be a major geopolitical concern over the next two years. Similarly, 52% also felt quotas and import restrictions, as well as sanctions and export controls, would be major concerns over the next two years.

Trump has used tariffs as a coercive tool against other countries—even the uninhabited ones. He’s issued or threatened to issue them for lots of reasons this past year, from rebalancing trade deficits, according to the office of the US trade representative, to persuading leaders to join his new “Board of Peace.”

Tariffs have all sorts of implications for CFOs beyond the obvious price hikes. As CFO Brew recently detailed, tariffs create cost volatility that makes it difficult to “keep revenue calculations predictable,” and also keep “forecasting and scenario planning…top of mind.”

“The way to look at [tariffs] is think about all the possible scenarios…and have a preparation and planning discussion around how [to] respond to those scenarios that would be most impactful,” Chrystina Howard, enterprise risk management (ERM) leader for insurance broker HUB International’s complex risk practice, told CFO Brew.

Managing geopolitical risk is complex, but possible! Howard said organizations can prepare for geopolitical volatility both by creating response plans and identifying a financial instrument, such as an insurance policy, to transfer some of the risk.

Organizations can’t possibly identify every possible risk lying in wait, nor do they really need to, according to Howard. A successful ERM program starts “with the effect end of things” to capture “what is the most critical aspect of each of these risks.”

“If you focus on what is going to cause [your company] business interruption, that’s the goal,” she said. “That’s the way to think about it, particularly with risks like these that are so complex and so volatile right now, you almost can’t come up with a scenario that’s actually going to play out.”

Truly resilient organizations in this international order will “understand the geopolitics of things now and where their business fits in,” Dragonfly’s Wilkinson said. That includes knowing whether the organization is viewed as a political actor or is operating in a “strategic sector” such as energy transition or artificial intelligence.

“There are absolutely opportunities there, but the winners will be those that have got the resilience and the agility and the foresight to take a read of where things are going and plan accordingly, particularly when it feels very, very difficult to plan anything more than the next five minutes,” he said.