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Introduction

In 2025, the global geopolitical balance is shifting. Economic Coercion has become a core strategy for many governments aiming to secure competitive advantages that will define their economies for the next 50 years.

While governments are playing this game, the impact is felt by the real targets – businesses and commercial operations — particularly those in technology, critical infrastructure, and those with global supply chains. From China’s export bans on rare earth minerals to U.S. semiconductor restrictions, Economic Coercion is no longer abstract: it’s hitting balance sheets and boardrooms in real-time.

If you’re a senior executive, ignoring this reality is like leaving your front door open during a storm. So, how do you protect your business from becoming collateral damage?

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The Playbook of Economic Coercion

Economic Coercion is the strategic use of trade restrictions, investment controls, and export regulations to force political or commercial outcomes. Think of it as geopolitics in a suit and tie.

The Top Targets:

• Technology & Semiconductors (e.g. U.S. export controls on chips to China)
• Agriculture & Food Supply Chains (e.g. Australian wine and barley, frequently susceptible due to the perishable nature of many products and difficulties finding alternative markets quickly)
• Critical Minerals & Energy Infrastructure (e.g. China’s dominance in rare earths)
• Biotechnology & Research Commercialisation (e.g. IP theft and data manipulation)
• Financial Services (e.g. exposed to sanctions and currency manipulation)
• Tourism (e.g., targeted through restrictions on group tours to specific countries)
• Higher Education (e.g. Universities reliant on foreign students are vulnerable to geopolitical and economic shocks, as well as rapid changes in consumer sentiment)
• Critical Infrastructure (e.g. critical component and part supply chains)

Industries particularly vulnerable to economic coercion often exhibit these factors:

• Raw materials – Industries dealing with raw materials are often heavily affected by coercive measures
• Strategic industries – Sectors with strong political lobbies in the targeted country are often chosen for coercion.
• Niche, high-value products – Industries producing specialised goods where consumer tastes can change may face longer-term impacts from temporary market losses.
• Industries dominated by a single country or region – Sectors where one nation has significant market dominance are more susceptible to coercion.

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The Risks to Your Business

Economic Coercion isn’t just about tariffs and sanctions. It’s about supply chain fragility, intellectual property theft, and regulatory traps that can cripple your operations overnight.

Under Australia’s Security of Critical Infrastructure Act Supply Chain Hazard Rules, businesses are now required to assess the availability of critical components from offshore suppliers. Why? Because relying on a single region for critical components (e.g. critical spare parts) leaves you vulnerable to coercive tactics.

Other ways Economic Coercion may materialise as risks in your business include:

• Supply Chain Disruption: Losing access to essential components from key international markets.
• IP Theft & Insider Threats: Your R&D data becomes a geopolitical bargaining chip.
• Regulatory and Compliance Nightmares: Sanctions and opaque foreign investment laws are applied to your business or its products and services.
• Market Access Loss: Being locked out of key export markets, either directly or indirectly.

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What You Can Do About It

In this environment, waiting to react is a losing strategy. The key to survival is monitoring your strategic environment, identifying risks early, and making decisions while you still have the advantage — not when you’re already vulnerable.

So, what should your playbook include?

• Diversify Your Supply Chains: Reduce dependency on single-source offshore suppliers. Consider nearshoring and local partnerships.
• Lock Down Your IP and Trade Secrets: Strengthen insider threat programs, trade secrets and IP protection programs (including in your supply chain and with collaboration partners) and cybersecurity controls.
• Enhance Regulatory Compliance: Stay ahead of foreign investment rules and export controls.
• Build Strategic Intelligence Capabilities: Monitor geopolitical developments to identify risks before they hit your balance sheet.
• Capture New Markets Before Competitors Do: When others are stuck in a vulnerable market, pivot to diversified regions.

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The Competitive Advantage of Intelligence

In this new era of geoeconomic fragmentation, good intelligence is good business strategy.By tracking geopolitical shifts and understanding which markets are at risk, executives can make smarter investment decisions, secure critical supply lines, and gain market share while competitors are distracted or trapped by coercion tactics.

Those who act early will not only avoid becoming victims but position themselves as leaders in emerging markets and technologies. Want tips on where to start? Well, read start with this article:

Using strategic early warning for advanced notice of emerging threats and geopolitical risks

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The Bottom Line

In 2025, geopolitical risk is now a business risk. If you’re leading in tech, agriculture, or critical infrastructure, you’re already on the frontline.

The question is: are you ready to protect your business from the next wave of Economic Coercion?

Would love to hear from others in the trenches — how is your business adapting?

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Further Reading

• Adams, M., Wickes, R., and Brown, N. (2022). Australia’s response to Chinese economic coercion: towards a comprehensive strategic approach to export diversification, University of Adelaide
• Australian Government, Security of Critical Infrastructure Act (2024).
• Bachmann, S, and McDonagh, N (2025). Trump’s Tariff War: Economic Coercion, Global Instability, and the Erosion of US Soft Power, Australian Institute of International Affairs.
• Curwell, P. (2022). Using strategic early warning for advanced notice of emerging threats and geopolitical risks
• Economist Intelligence Unit (2022). Business in an era of heightened geopolitical instability.
• European Commission, (2024). EU Anti-Coercion Instrument Policy Brief.
• Financial Times (2025) US imposes export controls on chips for AI to counter China.
• Girishankar, N. (2024). Resolving the Emerging Economic Security Trilemma, CSIS.
• Mao, F. (2024). China removes tariffs on Australian wine as relations improve, BBC News.
• Myers, L, and Goto, S. (2024). Countering Economic Coercion and Safeguarding the Indo-Pacific’s Economic Security
• OECD (2025). The Impact of Economic Coercion on Global Supply Chains.
• Piekos, W. (2024). Investigating Chinas Economic Coercion. Atlantic Council.
• Uren, D (2025). Economic coercion tests international organisations, Australian Strategic Policy Institute.
• World Economic Forum (2025). Future of Jobs Report
• World Economic Forum (2025). Navigating Global Financial System Fragmentation, Insight Report.

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