Today in geopolitical news and how comms pros should think and talk about it....

1. US relations with Europe enter a new paradigm: A significant realignment occurs in US-Europe relations, centered on defense spending and Ukraine. Trump's engagement with Putin on Ukraine negotiations, coupled with Def Sec Hegseth's "4 Nos" policy framework, signals a major shift that would require Europe to increase its defense spending. Bloomberg Economics calculates that protecting Ukraine and expanding their own militaries could cost the continent's major powers an additional $3.1 trillion over the next 10 years. This represents both a challenge and an opportunity for defense contractors and security-focused businesses in Europe.

2. AI is US v China v EU: The global AI competition is evolving into a three-way race with distinct characteristics. According to analysts, China is demonstrating breakthrough capabilities through DeepSeek, the US maintains its lead but may be taking the wrong approach, and Europe is positioning itself to potentially close the gap. This has implications for technology investment strategies and corporate R&D priorities.

3. The new North American trade reality: A fundamental restructuring of North American trade relationships is underway. Canada's unprecedented diplomatic mission, sending all 13 provincial premiers to Washington, and their openness to reducing US trade dependency suggests businesses should prepare for significant supply chain adjustments. The impact is particularly acute in manufacturing hubs, with five Ontario cities facing the greatest exposure to new tariffs. The Canadian Chamber of Commerce says Windsor would be hardest hit, followed by Kitchener-Cambridge-Waterloo, Brantford, Guelph, and Hamilton.

4. Boom for bombs: Global defense spending reached a record $2.46 trillion in 2024, with the US ($968 billion), China ($235 billion), and Russia ($145.9 billion) as the top spenders. This trend indicates expanding opportunities in the defense sector and adjacent industries, particularly in regions that are increasing their military self-reliance.

5. "No exemptions for you.": International trade tensions are escalating beyond traditional US-China dynamics. Trump's characterization of India as a "tariff king" and the implementation of new tariffs on allies like Canada and Argentina indicates a broader shift toward protectionism. Companies must prepare for a more complex and fragmented global trade environment with higher barriers and compliance costs.

Pro tip: Make sure you have a professional with expertise in geopolitical communications on your team. Such a pro will help you navigate geopolitical challenges related to your business objectives and confidently speak about this environment.

Caracal is here to help.

Enjoy the ride + plan accordingly.

-Marc