Global Supply Chains Under Strain: Navigating Geopolitical Tensions and Economic Uncertainty

Dharit Shah

Abstract: This article explores the impact of escalating geopolitical tensions on global supply chains and macroeconomic stability, with a focus on the challenges posed by the COVID-19 pandemic and ongoing conflicts. Geopolitical disputes, such as the U.S.-China trade war, the Russia-Ukraine conflict, and regional territorial disagreements, have exacerbated vulnerabilities in the interconnected systems that drive the modern global economy. These tensions disrupt supply chains, particularly in procurement, demand forecasting, and inventory management, while influencing business continuity and economic volatility. The study examines how nations and firms are adapting to these disruptions, with strategies such as reshoring, supply diversification, and "China+1" approaches. By analyzing the cascading effects of geopolitical shocks, the article highlights the need for enhanced resilience and adaptability in supply chain operations. This literature review synthesizes existing research to identify key gaps in understanding how firms and policymakers can balance efficiency with security, offering insights into sustaining macroeconomic stability amidst an increasingly fragmented global landscape.

Keywords: Geopolitical tensions, Supply Chain, Trade Wars, Macroeconomic Stability and Outcomes, Supply Chain Disruption and Resilience