Our analysis suggests that geopolitical risk is likely to rise for the remainder of this decade. Protectionism, sanctions, tariffs, export controls and trade wars will only intensify. History tells us that the more economic friction, the higher the risk of military conflict. The next few months will be crucial in determining the direction of various geopolitical hotspots.

The outcome of the US election will be pivotal with US foreign policy differing significantly under a Biden or Trump presidency, although any incoming US administration will preside over worsening ties with China. The period between November and January, which could see a change in the US administration, presents a window of vulnerability, both domestically and internationally. Forces seeking to weaken US influence in the world could decide to explore how far they can go. China’s military manoeuvres in the South China Sea and North Korea’s positioning towards the South must be monitored.

We anticipate increased fighting between Russia and Ukraine in the second half of the year. Russia aims to capture as much territory as possible before a potential change in the US administration and a possible ceasefire. At the same time, Ukraine’s defensive capabilities are likely to improve with the arrival of new weaponry and more manpower at the front.

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