The new rules of globalization: Geopolitical clusters and the fragile resilience of global trade
The Deloitte Geoeconomic Dynamics Index offers insights into the major geoeconomic trends and their implications for businesses
Globalization is being fundamentally reshaped by geopolitical tensions, making it increasingly important for companies to understand geoeconomic shifts and their business impact. The Deloitte Geoeconomic Index combines data across trade, finance and geopolitics to track shifts in international connections. Building on this data, we identify five key trends that define the evolving global landscape, with a special focus on the role of Europe and its future partnerships.
Global Level of connections across phases: Linkages peaked before the financial crisis and show a downward trend today
The cooperative international order of the early 21st century is increasingly giving way to geopolitical tensions, military conflicts and bloc building. These shifts directly impact businesses, which must now navigate investment restrictions, protectionism and tariffs. As a result, supply chains and trade corridors are set to evolve in increasingly complex ways.
The Deloitte Geoeconomic Dynamics Index offers a comprehensive and multidimensional view of these shifts by combining measures for international connections across trade, finance and geopolitics on a highly granular level. Here, we leverage the over 59 million datapoints of the index to address four core questions:
Five key geoeconomic trends
- Global linkages are on a downward trend in the 2020s
Global linkages stagnated during the COVID-19 pandemic before entering a decline – a trend that accelerated in 2024. Current levels are now slightly lower than at the beginning of the 21st century. - Dynamics vary across finance, geopolitics and trade
The decline in global linkages is primarily driven by a sharp decrease in global geopolitical alignment and weakening financial linkages. In contrast, global trade intensity has shown resilience with trade flows increasingly redirected between countries. - Distinct blocs and meta-blocs are shaping global linkages
As global linkages decline, geopolitically aligned clusters have strengthened. The Index identifies four distinct clusters – Europe+, North America-Pacific, Russia-Middle East and Emerging Markets – combining into two overarching meta-blocs: BRICS+ and the Western bloc. - Europe strengthens Western ties while reshaping trade relations
Europe has substantially deepened its economic and geopolitical linkages with Western allies while distancing itself from the Emerging Markets and Russia-Middle East clusters. However, geopolitics is not the sole factor shaping Europe’s trade patterns. While trade with aligned countries has intensified, Europe has also strengthened ties with selected BRICS+ countries, particularly those offering strong growth markets or critical commodities. - Europe’s trade corridors to 2035: Growth in expected and unexpected places
Projections suggest that in the coming ten years, Europe’s exports will see the most significant growth in Asia. The largest trade increases are expected with geopolitical allies, such as Japan and South Korea, as well as growth markets, such as Indonesia and the Philippines.
Businesses need to actively anticipate the impact of the ongoing geoeconomic shifts to build resilience and gain a competitive advantage in the rapidly shifting global marketplace.
Dr. Alexander Börsch
Chief Economist & Director Research
The convergence of politics and economics presents a pressing challenge for companies. To navigate complex geoeconomic dynamics, build resilience, and maintain competitiveness, businesses must adopt a long-term, geopolitically informed strategy.
Contact us
Dr. Timo Walter
Associate Manager | Economics
twalter@deloitte.de
Samuel Günther
Senior | Economics
samguenther@deloitte.de
