Global Overview – Q3 2025

The third quarter of 2025 will be defined by deepening volatility across global trade and supply chains, compounded by persistent geopolitical flashpoints and increasing pressure on fragile governments.

Disruptive U.S. trade policies will continue to generate global market uncertainty and contribute to supply chain disruptions, affecting everything from industrial components to critical minerals like rare earths. While Washington is likely to reach temporary arrangements with some of its key trading partners, these deals will fall short of providing long-term stability. This ongoing unpredictability will drive governments and multinational corporations to double down on diversification and nearshoring strategies in a bid to secure supply resilience.

Geopolitical Conflicts and Escalation Risks

On the geopolitical front, high-risk conflict zones will remain dangerously unstable. The Iran-Israel confrontation and the war in Ukraine both carry a persistent threat of escalation or regional spillover, as peace negotiations show little progress. Dormant conflicts—such as between Armenia and Azerbaijan, or India and Pakistan—also risk flaring up again amid unresolved disputes and stagnating diplomacy.

Efforts to manage these crises will be further complicated by a widening strategic and ideological divide between the United States and its traditional Western allies. Disagreements over defense priorities and trade policy will test Washington’s ties with key Asia-Pacific partners, including South Korea and Australia.

Fragile Governments Face Rising Domestic Pressure

Internally, fragile governments from France to Bangladesh will struggle to push through urgently needed reforms. Rising inflation, economic stagnation, and growing public frustration will raise the specter of social unrest. In Japan, legislative elections could further destabilize an already unpopular government, while West African states will continue to lose ground to jihadist groups expanding their territorial reach and undermining state authority.

Pockets of Progress Amid Uncertainty

Despite the global turbulence, a handful of governments will make progress. Germany’s new coalition will accelerate its economic modernization and defense reforms. Argentina will continue its macroeconomic stabilization push, buoyed by external support. South Africa will make incremental strides toward privatizing inefficient state-owned enterprises.

The third quarter of 2025 will be shaped by intensifying trade disruptions and geopolitical instability. Fragile states will face mounting social and political pressures, while international cooperation becomes harder to sustain. Nonetheless, amid this fractured landscape, some nations will seize the moment to advance long-delayed reform agendas — offering a glimpse of resilience in an increasingly volatile world.