Jimena Blanco, chief analyst at Verisk Maplecroft, spoke with Global Finance about escalating political risks just days after Republicans swept the US elections.
Global Finance: Where is Verisk Maplecroft seeing risk increase?
Jimena Blanco: We produce risk indices on over 200 issues across 198 countries, and when we look at our data, we’re seeing risks increase across a number of areas in ways we haven’t seen before. Whether it’s political violence, overall political risk, resource nationalism, or civil unrest, our data show that these risks are now at their highest levels ever.
The tensions are not just between the US and the West on one side, and China and its allies on the other; we’re also seeing more groups of countries fracturing. Over the last three years, the political risk has increased significantly in 99 countries out of the 198 in our dataset. We are talking about roughly half of the world. It’s not just about Ukraine, the war in Gaza, or the conflict in Lebanon, but also regions like Sub-Saharan Africa. The amount of land affected by conflicts has more than doubled in the past three years — it is now twice the size of India.
GF: What is the most likely impact on political risk from Donald Trump’s win as the next US President?
Blanco: Rather than the victory increasing political risk, it is a result of the increase in political risk that we have experienced in recent years. Domestically, I think tensions will remain high. According to our model, civil unrest and rioting risks are still high in the United States. The underlying factors—such as levels of polarization, the high cost of living, and fractures within the political system—are all present. For me, political polarization in the United States will remain high.
Regarding the war in Ukraine, a Trump presidency could increase the potential for a ceasefire or a peace agreement to be brokered. However, it may not be a particularly sound one, especially if it requires Kyiv to cede territorial gains made by Russia. We see this possibility as potentially short-lived and something that could increase medium- to long-term risks in other parts of Europe, not only in the Baltics but also in central Europe, where Russia still has significant interests. From a European perspective, there is probably no other issue of greater significance than the resolution of the conflict in Ukraine.
GF: What impact do you foresee on Mexico from Trump’s win?
Blanco: Regardless of who sits in the White House, the US relationship with Latin America has, over the past two decades, been defined by three issues: immigration, drug control, and near-shoring or reshoring. The latter has primarily taken off in Mexico, largely because of its free trade agreement. The key point of negotiation will be the United States-Mexico-Canada Agreement (USMCA), which is due for renegotiation in July 2026. The question is: what can Trump demand in exchange for rules of origin?
Foreign Direct Investment (FDI) trends show that Chinese companies are relocating to Mexico to produce there and then ship into the U.S., bypassing some of the restrictions and tariffs that could intensify under a second Trump administration.
Mexico’s new President, Claudia Sheinbaum, is a skilled politician. However, the technocrats who renegotiated the USMCA are no longer in the Mexican government, raising concerns among business leaders about the new team’s ability to renegotiate effectively.
GF: What is the role of the BRICS?
Blanco: Middle powers, especially large emerging markets, have a huge role to play in today’s geopolitical landscape. Countries like Brazil and India have an economic impact today that dwarfs what it would have been 60 or 70 years ago. The BRICS are interesting because they serve more as a platform for these countries to assert their influence on the international stage, rather than as a vehicle for economic integration.
Could the BRICS become a coalition of the West’s rivals? The alignment can shift, with revisionist states like Russia, Iran, North Korea, and China often grouping together. However, the BRICS also include Brazil, India, and South Africa, which do not necessarily fit that framework and may not wat to be too closely aligned with countries in increasing competition with the West. The BRICS primarily highlight how middle powers are engaging with each other, but it is more about political posturing than economic integration.
GF: What do you expect in terms of increased tariffs on trade?
Blanco: It will depend on how higher tariffs are negotiated and implemented. The key question is whether the proposed tariffs will be enforced to the extent that they backfire on US consumers, or if they will be used as a negotiation tool with other countries, possibly never fully realized as presented during the campaign. For example, will there be flat tariffs of 10 to 20% for most countries and 60% for China? Or will the Trump administration use these proposals as leverage in case-by-case negotiations?
For me, the critical question is whether these are actual policies that will be implemented or simply threats designed to force negotiations, using tariffs as a stick and other incentives as a carrot.
GF: How do you define ESG, and what does it mean in your work?
Blanco: ESG stands for environmental, social, and governance risk, but its definition can vary depending on who you’re speaking with. We’ve significantly expanded the governance aspect in recent years to include politics and geopolitics, moving beyond the traditional focus on board transparency. In the corporate world, our approach involves advising companies, investors, and financial institutions on the risks they face based on their geographical areas of operation.
For example, with an oil and gas company, we assess environmental risks like those that could impact their operations, such as whether they’re located in areas prone to flooding, earthquakes, or water shortages. Additionally, we examine political and geopolitical factors, such as the level of judicial independence, the effectiveness of the legal system, and the stability of the government.
Guyana is a prime example. When we began our work there 10 years ago, the country had no oil and gas industry, no regulations, no institutions, and lacked the necessary workforce. Much of what the private sector aims to achieve through ESG risk management is not just protecting their operations but also creating an environment that enables sustainable operations, including developing local supply chains and generating employment opportunities.
GF: Do people use insurance to mitigate political risk?
Blanco: Yes, businesses do purchase insurance for some of these risks. However, there’s currently a growing conversation within the insurance industry about whether we need new types of coverage. For instance, the traditional definition of political violence is quite narrow, but we’re increasingly seeing broader incidents like civil commotion, strikes, and riots. The industry now faces greater exposure as these issues begin to affect more developed economies. If you look back just five years, the level of civil unrest we’re witnessing today in places like Europe and the United States was much less common.
GF: How important are the people who will form the next US Administration? To what extent will they be executors of Trump’s will and program?
Blanco: If you join the Trump team, it’s with the understanding that Trump is the captain of the ship. Historically, there was little room for dissent in his first administration, and I expect there will be even less in a second term. The new team is likely to implement his policies faithfully. The reason this matters is that we can expect Trumpism to persist beyond Trump himself.
GF: What important topics have we not mentioned yet?
Blanco: An important aspect we often overlook is the risk associated with technology—not just cyberattacks by malicious actors, but also the exposure to climate impacts and infrastructure disruptions, and how these could affect our daily lives. For example, consider the recent storm in Valencia, where people were unable to communicate, transport goods, or clear roads. This was largely due to the loss of not only electricity but also telecommunications for an extended period. Now, imagine if a data center had been affected. When we think about how much we rely on these technologies and their vulnerability to various disruptions, it’s clear that, from a broader societal perspective, this is an issue we don’t consider often enough.
GF: What has been the impact on the cost of doing business?
Blanco: As deglobalization gains momentum, global trade restrictions and escalating diplomatic tensions have raised the cost of doing business to a 10-year peak. Companies in Western democracies bear the brunt of rising tax burdens and operational costs that have, in part, been exacerbated by their own countries’ protectionist policies. Our data reveals that harmful policy interventions have adversely affected business costs across Germany, the UK, Japan, South Korea and the US. Some estimates suggest the trade war’s cumulative impact on the global economy from 2018 to 2023 is between $1.5 trillion and $2 trillion.
