Impact of Geopolitical and Bilateral Trade Frictions on Global Supply Chain Resilience: Strategies for Multinational Corporations

Abstract

In the context of the growing interconnectivity of the global economy, the resilience of global supply chains (GSCs) is increasingly contingent upon a range of external factors, including geopolitical developments and the implementation of bilateral trade policies. This study examines the vulnerabilities faced by GSCs in recent years, particularly the challenges they have shown in responding to geopolitical events and bilateral trade frictions. Taking the United Kingdom’s exit from the European Union and the trade war between the United States and China as examples, this study analyzes the significant impacts of these events on GSCs, including issues such as increased operating costs and structural reorganization. This study also proposes strategies for multinational corporations to cope with the complex international environment, such as supply chain diversification and localization of production. It is found that enhancing supply chain resilience is crucial to cope with geopolitical risks and safeguard business continuity, which helps to improve their market competitiveness and ability to cope with unexpected events.