As we step into 2025, the global stage is more fragmented and unpredictable than ever. The Top Risks 2025 report by Eurasia Group, one of the world’s leading political risk consultancies, offers a sobering look at the forces driving instability across geopolitics, economics, and governance. From the erosion of global leadership to the rise of crony capitalism and escalating U.S.-China tensions, the report outlines the pivotal risks shaping the world’s trajectory this year.
Authored by Ian Bremmer and his team, the report captures the deepening divides in an era where no single nation or coalition is willing—or able—to lead. The fallout is clear: power vacuums, rogue states, and geopolitical brinkmanship are creating new vulnerabilities, while the international institutions designed to manage these challenges are increasingly obsolete.
This article explores the seven most pressing risks identified in the report, unpacking their causes, implications, and the potential for cascading disruptions in the months ahead. From the breakdown of global economic integration to the resurgence of unilateralism, these trends reflect a world entering a uniquely perilous phase of uncertainty.
1. The G-Zero Wins
The world has entered a dangerous era where no single nation or alliance is both willing and able to lead on global issues, creating a profound leadership vacuum. This phenomenon, known as the G-Zero, leaves international institutions like the UN, IMF, and World Bank unable to address pressing global challenges. The failure to adapt these institutions to reflect shifting power dynamics has created instability. Nations are increasingly pursuing self-interested policies, exacerbating the breakdown of global order. Rogue states, unchecked power vacuums, and heightened risks of miscalculation are fueling a geopolitical recession. The cumulative impact of this leadership deficit has left the world at its most unstable since the 1930s or the early Cold War, with a growing likelihood of large-scale conflict.
2. Rule of Don
Donald Trump’s return to the presidency will redefine governance in the United States, consolidating power in an administration more aligned with his vision than during his first term. Armed with a stronger base of loyalists, Trump will prioritize dismantling the so-called “deep state,” politicizing institutions such as the FBI and Justice Department to shield allies and target opponents. Regulatory decisions will be shaped by personal loyalty rather than market competitiveness, creating a system of crony capitalism. Businesses will need to navigate a volatile environment, where proximity to Trump’s administration dictates success. While democratic institutions like the judiciary and the Constitution are expected to endure, the erosion of political norms will degrade trust in the rule of law, leaving American democracy weaker.
3. US-China Breakdown
The tenuous détente between the U.S. and China, achieved during Joe Biden’s presidency, will collapse under Trump’s leadership. A fresh wave of tariffs on Chinese goods will trigger retaliatory measures, escalating economic decoupling between the two largest economies. Beyond trade, the U.S. will target Chinese firms with technology restrictions and sanctions, deepening mistrust. Actions perceived as meddling in China’s domestic affairs, such as increased support for Taiwan or visa restrictions for Chinese citizens, will further inflame tensions. Both nations will focus on domestic priorities, but the absence of mechanisms to stabilize relations increases the risk of unintended escalations. Supply chains will fragment, disrupting global trade and raising costs for businesses and consumers worldwide.
4. Trumponomics
Trump’s economic policies will initially benefit the U.S., which enters 2025 with low unemployment and easing inflation. However, his agenda will undermine this strength. Aggressive tariffs will increase consumer prices and disrupt trade flows, disproportionately affecting lower-income Americans. Meanwhile, a crackdown on undocumented migrants will shrink the labor force, exacerbating labor shortages in agriculture, construction, and hospitality. Deregulation may offer a short-term boost to industries like fossil fuels and tech, but its overall economic impact will be limited. Combined with soaring deficits and higher interest rates, these policies will constrain economic growth. Businesses and investors will face heightened uncertainty as Trump’s unpredictable decision-making style amplifies market volatility.
5. Russia Still Rogue
Despite its economic and military struggles, Russia remains the world’s foremost rogue actor. A likely ceasefire in Ukraine, pressured by Trump, will freeze territorial disputes rather than resolve them, leaving Ukraine vulnerable and Europe exposed to future aggression. Russia will intensify its asymmetric warfare tactics, including cyberattacks, election interference, and sabotage of infrastructure in Western nations. Moscow’s strategic partnerships with Iran and North Korea will continue to disrupt global stability. With its revisionist agenda, Russia aims to weaken NATO and undermine Western democracies, using unconventional methods to create chaos and pursue its geopolitical goals.
6. Iran on the Ropes
Iran’s regional influence has diminished dramatically following the collapse of key allies like Hezbollah and the Assad regime. Isolated and weakened, Tehran faces mounting internal and external pressures. While Israel may capitalize on Iran’s vulnerabilities with covert operations and potential strikes against its nuclear program, Iran’s remaining military assets—missiles and drones—pose risks of escalation. A U.S.-led “maximum pressure” campaign under Trump will further squeeze Iran economically, though it is unlikely to lead to a full-scale war. Domestically, Iran is grappling with widespread discontent, economic mismanagement, and a leadership succession crisis, putting the survival of the Islamic Republic at stake.
7. Beggar Thy World
Global economic fragmentation will accelerate as the U.S. and China pursue protectionist policies. Trump’s tariffs and China’s overproduction of goods like electric vehicles and solar panels will distort markets, forcing countries to choose sides. Emerging economies, already burdened by debt and weak growth, will struggle to navigate this environment. Developing nations reliant on exports to the U.S. or China will face trade barriers, while high borrowing costs and a strong dollar will constrain their policy options. Even developed economies like Japan and Italy will feel the strain, as debt levels and fiscal challenges mount. The shift toward nationalistic economic policies threatens decades of global integration, raising costs, slowing growth, and undermining the global recovery.
Comments