Economic Warfare

While you are no doubt familiar with the economic sanctions placed on Russia as a result of their 2022 invasion of Ukraine, you may be less aware of how regular economic warfare between countries can impact your business.

Economic measures like tariffs, sanctions, embargoes, and state-backed corporate espionage  are often used to harm a country’s competitors and gain a strategic advantage in international relations.  Tariffs, for example, are one of the most common forms of economic warfare.  If your business relies on imported goods, you may be forced to raise prices to cover the cost of tariffs, which may lower your sales.

Another form of economic warfare that can harm your business is sanctions.  Freezing assets, trade prohibitions, or preventing certain financial transactions can lead to major business disruptions.  You might even be forced to leave a particular market or suffer significant financial losses.

Similarly, if you’re not prepared in advance to deal with a government-imposed restriction on trade with a single nation or group of nations (an embargo), then you could also take a massive hit to your profitability and viability.

Less obvious symptoms of economic warfare such as a decrease in economic growth or consumer confidence can also put a stranglehold on you if you do not take proactive steps to deal with them.  For example, an increase in the price of goods in a particular country means consumers there might have less money to spend on your products or services.

By assessing your risks to economic warfare in advance, you can plan ahead for rising costs, falling sales, and potential financial losses from embargoes, sanctions, and tariffs.  Infortal looks at indicators such as the geopolitical and economic competition between countries, lobbying efforts, boots on the ground intelligence, and political leadership rhetoric to give you in depth analysis on when you can expect to have to deal with any potential consequences of economic war.