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PRISM'S CURRENT VIEW
Major headlines this month focused on US threats toward Greenland, the US capturing Venezuela's leader, new tariff threats, and negotiations to end the war in Ukraine:
Tariffs: The US threatened to raise tariffs on various countries, including South Korea and several European countries. So far, no tariffs have been changed. A Supreme Court ruling that could nullify some of Trump's tariffs is expected in the coming weeks.
Ukraine: Negotiations continue to progress, but there is no sign that the conflict will end in the near term, despite pressure from the US to end the war.
Economic growth: The US saw blockbuster growth in Q3, but performance will have likely slowed in Q4. Elsewhere, the outlook has remained relatively unchanged.
Semiconductors: Memory prices have increased significantly in recent months, according to reports, with shortages of some chips becoming more common.
Middle East: The US and Israel may be preparing strikes on Iran over the coming weeks. No timeline is yet clear. However, strikes are likely before May 2026.
Oil: Expect oil prices to remain subdued, despite new sanctions on Russian oil companies, threats targeting Iran, and other disruptions. Other suppliers can likely ramp up production to offset disruptions from potential conflicts.
RISK DASHBOARD
Economics
Inflation rose in the US, signaling that the impacts of tariffs are being passed onto trade. Growth outlooks for advanced economies generally improved, while China beat growth expectations but saw deflation intensify.
Oil Prices
Low oil prices remain likely to persist in the near term. However, there are various risks to monitor that threaten to restrict supplies and drive prices higher.
Risk level:
Risk trend:
Moderate
Stable
Global Inflation Outlook
Inflation risk remains stable across most markets, but it has risen in the US and UK.
Risk level:
Risk trend:
Moderate
Increasing
Global Growth Outlook
Global economic risks increased this month, as uncertainty around the trajectory of the US economy increases global impacts.
Risk level:
Risk trend:
Moderate
Stable
HIGHLIGHTED TOPICS
Logistics
Shipping rates rose relative to last month, as shippers rushed to book routes amid tariff deferrals. Risk remains high in the Red Sea.
Critical Infrastructure
Attacks on critical infrastructure have escalated significantlya dn could cause significant risk across supply chains in the future.
Risk level:
Risk trend:
High
Increasing
Maritime Shipping
Risks to maritime shipping remain elevated amid disruptions in the Red Sea, strikes in Europe and continued tensions in the Middle East that could spark disruptions in the Strait of Hormuz.
Risk level:
Risk trend:
High
Increasing
HIGHLIGHTED TOPICS
Materials & inputs
The risk of an energy shortage increased in Europe as storage levels dropped. Export controls on critical minerals and semiconductors have eased after the US and China reached a temporary agreement on trade disputes.
Artificial Intelligence
AI will be a transformative enterprise technology. But, it comes with near-term cost challenges and ESG risks.
Risk level:
Risk trend:
Low
Declining
Critical Minerals
Risk to critical minerals rose as China's export controls disrupt access to supplies.
Risk level:
Risk trend:
High
Increasing
Semiconductors
Risks to the semiconductor sector increased this month but remained moderate. The top concern is US tariffs on chip imports.
Risk level:
Risk trend:
Moderate
Increasing
HIGHLIGHTED TOPICS
ESG
ESG policy is set to weaken in the European Union and the United States. Notably, US policy is shifting to be even more hostile to ESG policies, while the EU took moves to weaken some environmental and due dilligence policies.
ESG Macro Overview
The pace of ESG progress faces setbacks, forcing a more strategic view on ESG initiatives and creating new compliance risks.
Risk level:
Risk trend:
Moderate
Stable
ESG Transparency & Disclosures
EU transparency rules drive a race to the top that drives costs and reputational risk.
Risk level:
Risk trend:
Moderate
Declining
Carbon Taxes & Import Rules
New EU rules set the stage for significant cost increases from 2026 onward.
Risk level:
Risk trend:
Moderate
Stable
Climate & Net-Zero Policy
Supply chain leaders must prepare for the expanding scope of environmental risks and the potential for sudden policy change.
Risk level:
Risk trend:
Moderate
Stable
HIGHLIGHTED TOPICS
Domestic politics & elections
Donald Trump's changes to US policy have been highly disruptive, and tariffs are the preeminent risk.
US Policy Change
Trump Administration actions must be monitored for cost, disruption, and compliance risks.
Risk level:
Risk trend:
Critical
Increasing
China Decoupling
Risks associated with doing business in China are high, and an EU-China trade war appears increasingly likely.
Risk level:
Risk trend:
High
Stable
US Tariff Policy
The risks of significant disruptions to trade and higher costs increased over the last month. New tariffs are likely across various categories.
Risk level:
Risk trend:
Critical
Stable
HIGHLIGHTED TOPICS
Geopolitics & more
The US sanctioned Russian oil companies, putting more pressure on Russia. In the Middle East, escalation risk remains elevated, despite the ongoing ceasefire in Gaza.
China Decoupling
Risks associated with doing business in China are high, and an EU-China trade war appears increasingly likely.
Risk level:
Risk trend:
High
Stable
Middle East Conflict
Risk rose sharply after the US launched strikes on Iran on June 22. There remains a significant risk of continued instability in the region.
Risk level:
Risk trend:
High
Increasing
Ukraine War
Militarily at a stalemate, but with a change in US policy toward Ukraine, the outlook is more uncertain than ever.
Risk level:
Risk trend:
Moderate
Stable