Resilience in the Face of Tariffs: Seizing Opportunities Amidst Global Disruption
Introduction
All organizations are now being tested following the announcement of the new US tariffs on 2nd April 2025, the retaliatory tariffs announced by other countries and the subsequent imposition of additional tariffs by the US. It is fair to call this a ‘black swan event,’ with apologies to our Western Australian colleagues.
Organizational Resilience is defined as ‘the ability of an organization to anticipate, prepare for, respond and adapt to incremental change and sudden disruptions in order to survive and prosper’.
This concept is more important now than ever. It emphasizes the importance of being proactive, adaptable, and robust in the face of challenges, ensuring that organizations can not only withstand disruptions but also seize opportunities for growth and improvement. Examples of companies that fell behind to new competitors during periods of disruption include Blockbuster, Kodak, Nokia, Polaroid, and Toy “R” Us. Companies that reinvented themselves include IBM, Netflix, Apple, Amazon, American Express and 3M.
“The average lifespan of an S&P 500 company has shrunk significantly, dropping from 60 years in the 1960s to just 15 years today.”
This dramatic shift highlights a fundamental truth: businesses that fail to anticipate risks and adapt to market changes are more likely to become obsolete. To stay competitive, companies must not only navigate potential pitfalls but also capitalize on emerging opportunities.
As we approach the changed world in 2025 and beyond, business leaders must prepare for a range of risks that are likely to disrupt operations, as well as seize opportunities that could propel their businesses forward. Here’s an in-depth look at the top 10 risks and opportunities facing organizations in the Asia-Pacific region with international and China-based supply chains:
The Top 10 Business Risks in 2025
1. Business Interruption: The risk of business interruption is higher now than ever before. Even if an organization is not directly affected by tariffs because it does not manufacture or ship goods, it is likely to have customers that are affected. In a normal year, geopolitical tensions and supply chain failures are among the key threats. Natural disasters and unforeseen global events, such as pandemics, can also severely impact operations. Companies need to invest in robust contingency plans and diversify their supply chains to mitigate these risks.
2. Cybersecurity Threats: As digital transformation accelerates, so do the risks associated with cybersecurity. Data breaches, ransomware attacks, and increasing regulatory scrutiny over data privacy are major concerns. Organizations must prioritize cybersecurity measures to protect sensitive data and comply with evolving regulations.
3. Economic Uncertainty: The recently imposed tariffs are likely to lead to unpredictable consequences, reorganization of supply chains and present both risk and opportunities. On top of this, fluctuations in interest rates, inflation, and global trade instability are creating an unpredictable economic environment. Businesses need to remain agile and develop strategies to manage financial risk and ensure business continuity in these times of economic turbulence.
4. Supply Chain Vulnerabilities: The global supply chain has been under significant stress in recent years. Issues such as ESG (Environmental, Social, and Governance) compliance, fluctuating exchange rates, and unreliable suppliers pose substantial risks. The new US tariffs and escalating responses will add to this. Diversifying suppliers, strengthening local networks, and ensuring compliance with evolving regulations will help businesses safeguard their supply chains.
5. Regulatory Complexity: In addition to tariffs, governments are increasingly introducing new policies and legal frameworks that businesses must navigate. This growing regulatory complexity requires companies to be proactive in understanding the rules and adapting their
operations accordingly. Failure to do so can lead to legal challenges and financial penalties.
6. Talent Shortages and Workforce Challenges: A competitive labor market and changing workforce dynamics make it harder for businesses to attract and retain top talent. Companies must invest in employee development, enhance workplace culture, and offer competitive benefits to stay ahead of the competition for talent.
7. Environmental and Social Pressures: As ESG expectations become mainstream, businesses face mounting pressure to adopt sustainable practices. Customers, regulators, and investors are increasingly holding companies accountable for their environmental and social impact. Companies that fail to meet these expectations risk reputational damage and loss of business.
8. Rapid Technological Change: Technological advancements, particularly in AI and automation, are rapidly transforming industries. Companies that are slow to adopt these technologies risk falling behind their competitors. Staying ahead of technological trends is critical to maintaining a competitive edge in the marketplace.
9. Geopolitical Uncertainty: Trade wars, tariffs, and the shifting dynamics of global economics create a volatile environment for businesses. Companies must stay informed about geopolitical developments and be prepared to adapt their strategies in response to changes in international trade policies, in addition to the current focus on US and reciprocal tariffs.
10. Intellectual Property Risks: The increasing threat of corporate espionage and intellectual property theft presents significant risks to businesses. Protecting intellectual property through robust legal frameworks and security measures is vital to maintaining a competitive advantage. This risk increases under AI.
The Top 10 Business Opportunities for 2025 and Beyond
1. AI and Automation: Artificial intelligence and automation offer businesses the
opportunity to streamline operations, improve efficiency, and reduce costs. By embracing these technologies, companies can gain a competitive edge in an increasingly fast-paced market. Organizations can also utilize solutions that assist with compliance to evolving tax and regulatory frameworks.
2. Sustainability and ESG Initiatives: Adopting environmentally responsible practices is no longer optional. Consumers, investors, and governments are demanding higher levels of sustainability from businesses. Embracing ESG initiatives can help companies attract new customers, improve brand loyalty, and reduce regulatory risk.
3. Digital Transformation: The integration of smart technologies into operations and customer interactions is essential for business success in 2025 and beyond. Digital transformation enables businesses to enhance efficiency, reduce costs, and deliver superior customer experiences.
4. Diversification: By expanding supplier bases and entering new markets, businesses can reduce their dependency on single sources. This diversification provides a hedge against economic downturns and disruptions such as tariff changes. Additionally, it opens new growth avenues.
5. Innovation: Investing in research and development to create new products and services enables businesses to future-proof their revenue streams and stay ahead of market demands.
6. Global Expansion: Expanding into high-growth international markets offers businesses new opportunities for revenue and market share. Companies must conduct thorough market research and understand the regulatory and cultural nuances of foreign markets to succeed.
7. Resilient Supply Chains: Building more resilient supply chains is crucial for businesses looking to mitigate risks and ensure continuity. Strengthening relationships with suppliers, diversifying sources, and localizing critical operations can help businesses stay nimble in uncertain times.
8. Customer-Centric Strategies: Personalizing the customer experience is key to fostering loyalty and improving retention rates. By utilizing data analytics and technology, businesses can tailor their products, services, and marketing efforts to meet the evolving needs of their customers.
9. Strategic Partnerships and Collaborations: Forming strategic alliances with other businesses can help unlock new growth opportunities. Collaborations can provide access to new markets, technologies, and expertise that would be difficult to achieve independently. Given the effects of the tariff changes, it is likely there will be risk for some and opportunities for others to expand and redefine the new order.
10. Workforce Development and Upskilling: Investing in employee development is essential for creating a competitive talent pipeline. By offering training programs and career development opportunities, businesses can enhance workforce capabilities, improve overall productivity, and reduce employee turnover.
These risks and opportunities highlight the dynamic and complex environment that organizations in the Asia-Pacific region will navigate in 2025 and beyond. Managing the opportunities effectively will not only plug the holes and leaks, but will also mitigate the risks, therefore enabling businesses to fill their bucket.
