International trade is more than a backdrop to business in today’s hyper-connected world—it’s a defining force. For C-suite executives and business strategists, the intricacies of trade agreements, tariffs, and global regulations demand more than surface-level awareness. They require a nuanced understanding of how shifting policies and geopolitical tensions can influence everything from supply chains to long-term strategic planning.
Jonas Gamso, deputy dean of knowledge enterprise and associate professor at Thunderbird School of Global Management at Arizona State University, shared some ways business management and strategy are impacted by international trade.
International trade and business agreements such as the USMCA, EU trade deals, and WTO frameworks set the stage for how businesses engage in cross-border operations. These agreements can open new markets, streamline supply chains, and reduce operational costs—but they can also require companies to pivot quickly when terms evolve.
“I liken them to ‘rules of the road’,” Gamso said. “When you drive on a highway, you can adjust your speed, change lanes, or pull over, but you cannot make a U-turn. Similarly, trade agreements set parameters within which companies can operate flexibly, while prohibiting certain moves altogether.”
- They create preferential relationships that may make some markets more viable, even if traditional economic indicators suggest otherwise.
- They signal political goodwill among member states, suggesting that cross-border relationships are stable and unlikely to be disrupted.
- They often (but not always) provide formal protections for traders and investors against political risks.
Teaching executives how to anticipate and respond to these changes is essential in leadership development programs. Scenario planning, trend forecasting, and an understanding of political risk are common tools used to embed strategic agility.
“To prepare leaders, I encourage a political economy perspective,” Gamso said. “Trade agreements govern economic exchange, but they are inherently political, shaped by domestic politics and geopolitical strategy. Without understanding the underlying political drivers, it becomes difficult to forecast changes or build resilient long-term plans.”
Tariffs and the art of risk management
Tariffs and trade barriers are no longer occasional disruptions—they are ongoing strategic concerns, especially in 2025. Whether imposed in response to international disputes or as part of long-term policy shifts, tariffs can significantly alter cost structures, supply decisions, and pricing models.
Executive education today emphasizes risk diversification, including supply chain flexibility and geopolitical scenario analysis. Tools such as AI-powered supply chain visibility platforms and partnerships with global advisors are also gaining traction.
Gamso said he often teaches a framework that offers companies four strategic options for responding to risk:
- Avoid risky environments
- Adapt to changing conditions
- Transfer risks to others (e.g., through insurance or contract terms)
- Diversify to ensure that risk exposure does not threaten the entire enterprise.
“Today, I emphasize an additional principle: patience,” he said. “Policy is changing rapidly in a way that makes it difficult to predict what things will look like in five months, let alone five years. Within this context, companies have to appreciate that caution may be warranted in the short term.
“I also encourage developing contingency plans so that companies can pivot quickly as the global landscape evolves.”
Also read: Mastering international business: 8 essential skills for success
The regulatory balancing act
Negotiating the fine line between global standardization and local compliance is one of the more challenging aspects of international operations. Executives are tasked with building systems that allow for brand consistency while also satisfying the unique regulatory environments of different countries.
“My advice is straightforward: local regulations are obligatory, while global standards are aspirational. Firms must comply fully with local rules, unless doing so would violate home-country laws,” Gamso said. “At the same time, companies can exercise flexibility in how they adopt and prioritize global standards.”
This requires a flexible compliance infrastructure, as well as cultural fluency—another growing priority in executive leadership programs. Gamso also recommends robust stakeholder mapping.
“Executives should identify which standards matter most to their customers, investors, supply chain partners, employees, and communities, and focus their global standardization efforts accordingly,” he said.
Building cross-cultural and political acumen
Today’s executive must be part strategist, part diplomat. Leading across borders demands emotional intelligence, cultural sensitivity, and an understanding of political landscapes. These skills are often taught using case studies, leadership simulations, and real-time analysis of global events.
“My colleagues and I have always emphasized that global business cannot be fully understood or successfully navigated without an appreciation of international politics and world cultures,” Gamso said. “This is especially true today, with the return of great power politics, political change happening in many countries, and the elevation of nationalism. Within this context, 21st century leaders must be able to manage political risks and negotiate across cultural contexts.”
Gamso said Thunderbird focuses on the global needs of the business manager.
“In broad terms, we offer a multidisciplinary curriculum drawing from political science, sociology, and business strategy,” he said. “More specifically, my classes often focus on identifying political risks, going beyond headlines to understand the underlying institutional factors that make risk incidents likely.”
The road ahead: Mindsets for the future
As the pace of global change accelerates, so does the need for leaders who can embrace complexity. Forward-thinking organizations are investing in executive education that promotes systems thinking, agility, and ethical leadership.
“Risk management will be incredibly important for leaders in the current environment,” Gamso said. “There is so much uncertainty, stemming from rising nationalism and protectionism, shifting political norms, and rising great power politics, that we cannot just assume that globalization will continue on the trajectory that it has been on since the end of the Cold War.”
He said that a fundamental understanding of technology and technological change will be essential.
“Technological innovation and disruption is advancing rapidly and those who fail to adapt risk being left behind,” he said. “Change can be difficult, but it is essential, and change management techniques will be important to helping organizations and employees succeed in this new and evolving landscape.”