The volatility of the global economy has increased dramatically. Crises such as the COVID-19 pandemic and the prevalence of supply-chain disruptions, geopolitical conflicts, and environmental disasters demonstrate the increased risk of doing business internationally. The US economy is not an island in this landscape. What are the major sources of international risk facing the US economy, and how are they expected to affect US productivity and growth?

Recent disruptions in world trade contributed to the inflation surge observed in many countries, including the United States. On the other hand, globalization was a deflationary force for much of the 21st century. Will the recent shift toward a more fragmented global economy contribute to average inflation? Or could protectionism enable better control of domestic conditions through monetary policy? How should US monetary policy react to and coordinate with other policies, notably trade policies?

Supply-chain disruptions during and after the COVID-19 pandemic underscored the interconnectedness of product markets around the globe. Input shortages, due to public health crises, extreme weather events, or geopolitical tensions can affect the entire global supply chain, engendering inflationary pressures and stymieing consumption and growth. How have global supply chains responded to increased risks and policy initiatives to make domestic production networks less dependent on foreign suppliers? Considering the recent experience, is the world economy today more—or less—resilient to disruptions? What is the role of US trade patterns in shaping global supply chains?

Protectionist policies arise from, among other factors, a desire to strengthen domestic industries, reduce reliance on specific countries, and limit an adversary’s geopolitical influence. However, these measures can lead to a fragmented global landscape that is divided into blocks aligned by geopolitical interests. A fragmented world may be less resilient to both external and internal shocks. Moreover, as the United States reduces its economic ties with certain countries, it risks diminishing its geopolitical influence. How should policymakers approach the tradeoff between insulation and diversification? Did trade policies over the recent decades go too far in the direction of diversification at the cost of resilience? If so, is the recent deglobalization trend correcting for this excess? Or is the trend moving too far in the direction of resilience?

While the changing global landscape has affected countries worldwide, firms and industries within countries may have also been affected, with potentially heterogeneous effects across them. How have US companies reacted to new tariffs and shifting geopolitical risks? What are the consequences for profit margins, productivity, and employment at firms that were differentially exposed to foreign demand and supply shocks? Which US industries and regions are likely to gain, and which are likely to lose from the emerging trade paradigm?

Multinational corporations are deeply interconnected with foreign markets while simultaneously playing a significant role in their domestic economies. US multinationals are key drivers of the country’s GDP and dominate global trade in several industries. They now face growing challenges and opportunities from recent protectionist policies and high volatility in international markets. At the same time, these companies may have unique advantages enabling them to adapt more easily to global risks and changing government policies. How are US multinationals adjusting to this evolving international landscape? How should policymakers account for the role of multinationals in shaping their policies?

Amid shifting geopolitical risks, policymakers have a menu of options, including industrial policy. Such policies may take various forms, from tariffs to subsidies to more direct government regulation of specific industries. How has industrial policy in the United States evolved over the 20th and 21st centuries? And how have shifting trade patterns affected strategic sectors such as energy, microchips, and resource extraction? What shape has retaliation from foreign countries taken so far?