For more than two decades following the collapse of the Soviet Union, the world’s economic and political order appeared to settle into a unipolar configuration dominated by the United States and its liberal democratic allies. Globalization boomed, supply chains spread across continents, and capital flowed freely. Western companies enjoyed predictable market conditions, and investors could assume—at least in broad strokes—that the liberal, rules-based system would remain stable. However, this post-Cold War era of relative geopolitical calm has begun to unravel. Great power competition is back, and its resurgence is reshaping the global landscape, challenging long-held assumptions, and affecting how businesses operate.

 

Central to this shift is the reemergence of China and the more assertive roles played by Putin’s Russia and, to a lesser degree, the Islamic Republic in Iran. China’s rapid economic and technological ascent has transformed it into a formidable rival to Western influence. Meanwhile, Russia’s aggressive foreign policies and the West’s response—most prominently seen after Russia’s invasion of Ukraine—have renewed the specter of old-style geopolitical contestation. Iran’s ambitions and antagonistic stance toward the West add to this complex web of rivalries. These dynamics feed into a climate where national security and strategic interests increasingly dictate the terms of trade and investment.

 

The effect on globalization is profound. Where once the primary goal of corporations was cost-efficient sourcing and production to serve global markets, today’s priority is risk management and resilience. As governments scrutinize critical technologies, supply chains, and data flows, businesses can no longer assume that the cheapest or most efficient option is politically viable. The shift toward “decoupling” from China—or at least reducing dependency on it—captures this new reality. Western governments, concerned about intellectual property theft, economic coercion, and national security vulnerabilities, are now pushing companies to diversify their supply chains. While Southeast Asia, Mexico, and Eastern Europe are emerging as alternative production hubs, the process is neither straightforward nor inexpensive.

 

The challenge is not limited to China. Growing tensions with Russia, especially in energy and raw material sectors, have highlighted the costs of over-reliance on adversarial states. Meanwhile, continued concerns about Iranian policies and sanctions regimes mean that firms must navigate a labyrinth of compliance requirements before venturing into that market—or decide not to at all, most have chosen the latter.

 

For Western companies, managing these shifts is a delicate balancing act. Redesigning supply chains, ensuring compliance with evolving sanctions, and navigating stricter investment screening processes, all come at a price. Investors and shareholders must grapple with the reality that rapidly shifting geopolitical risk is now a core element of business strategy. Those companies that proactively adjust—investing in compliance, strengthening due diligence, diversifying their supplier base, and building in greater strategic resilience—stand a better chance of weathering the storm.

 

Risk management and compliance have thus become central concerns. Boards and executives must regularly reassess their exposure to political and regulatory uncertainty. The return of great power competition has injected a new layer of complexity into global business, one that demands foresight, adaptability, and a willingness to embrace a more fragmented international system.

 

The golden age of globalization is over. The blitzkrieg of deglobalization begins.