Daily Risk Report: Geopolitical tensions, multipolar shifts and challenges abound

As of 25 September 2025, the global risk landscape remains elevated amid persistent geopolitical tensions, economic uncertainties and strategic vulnerabilities, with cascading implications for Australia as a key Indo-Pacific player and commodity exporter.

As of 25 September 2025, the global risk landscape remains elevated amid persistent geopolitical tensions, economic uncertainties and strategic vulnerabilities, with cascading implications for Australia as a key Indo-Pacific player and commodity exporter.

Geopolitically, escalating US–China rivalries, ongoing Russia–NATO frictions, including a recent Russia–Estonia airspace dispute, combined with evolving Middle Eastern dynamics, such as growing international recognition of Palestine, are serving to foster the development of a fragmented, multipolar world order where no single power dominates.

Economically, while global growth has shown resilience in the first half of 2025 – supported by monetary easing – downside pressures from trade barriers, policy shifts under potential US leadership changes and inflationary trends in major economies, like the US and Europe, could trigger recessions or volatility in commodity markets.

Strategically, cyber threats, climate-induced extremes and resource wars are amplifying vulnerabilities, with Australia’s exposure compounded by its reliance on alliances like AUKUS and trade with Asia.

For Australia, these risks manifest in potential trade disruptions with China – its largest partner heightened defence pressures in the Pacific – economic slowdowns from global demand weakness, and acute domestic threats from climate events like floods and heatwaves, which could cost billions in recovery and threaten coastal populations.

Meanwhile emerging factors such as accelerating climate tipping points and geopolitical realignments underscore the need for adaptive policies to safeguard national security, economic stability and resilience.

Ongoing geopolitical risks:

US–China breakdown and trade rivalries: intensifying competition, including new tariffs and investment restrictions, risks fragmenting global supply chains and escalating to cyber or military confrontations.

Impact on Australia: as a major exporter to China (iron ore, coal), disruptions could slash export revenues by billions, strain AUKUS alliances and heighten tensions in the South China Sea, potentially drawing Australia into regional conflicts.


Russia–NATO tensions and rogue actions: persistent aggression, including the Russia–Estonia airspace dispute and ongoing Ukraine conflict, sustains energy insecurity and cyber threats.

Impact on Australia: Indirect effects through global energy price spikes could inflate domestic costs, while NATO-aligned commitments via alliances may increase defence spending burdens.


Middle East instability and Palestine recognition: the growing push for a two-state solution amid international recognitions (e.g. by the UK, Canada, Australia) could de-escalate or inflame tensions, risking broader conflicts.

Impact on Australia: potential oil supply disruptions could raise fuel prices, affecting transport and agriculture sectors, with diplomatic shifts possibly straining relations with key allies.


Pacific security dynamics: China’s warnings to Papua New Guinea over defence deals with Australia highlight influence competitions.

Impact on Australia: risks eroding regional influence, increasing migration pressures and necessitating higher security investments in the south-west Pacific.

Economic risks:

Global growth slowdown and policy uncertainty: resilient but subdued prospects, with US inflation, European fragility and Chinese challenges amid trade barriers.

Impact on Australia: Reserve Bank of Australia (RBA) vigilance on risks could delay rate cuts, stifling growth; weaker global demand may hit commodity exports, projecting below-trend gross domestic product growth.


Inflation and monetary easing effects: lagged benefits from rate cuts support growth but volatility in PMIs signals contraction risks in manufacturing.

Impact on Australia: higher energy and financing costs could exacerbate household pressures, with RBA caution potentially leading to prolonged high rates and reduced consumer spending.


Trade and immigration shifts: US tariffs and policy changes (e.g. “Trumponomics”) disrupt global flows, with immigration curbs affecting labour markets.

Impact on Australia: potential export declines and labour shortages in key sectors like mining and agriculture, compounding productivity crises.

Strategic risks:

Cyber attacks and digital vulnerabilities: rising threats in critical sectors like energy and healthcare amid geopolitical cyber warfare.

Impact on Australia: increased regulatory focus on resilience but supply chain gaps could lead to disruptions in retail and infrastructure, costing businesses billions.


Resource and migration pressures: potential food/water shortages and climate migration could spark conflicts.

Impact on Australia: strained borders and resources, with economic hits from stranded assets and insurance hikes.

In summary, Australia finds itself navigating a turbulent global landscape marked by heightened geopolitical tensions, economic headwinds and strategic vulnerabilities.

From the simmering US–China rivalries threatening our vital trade links to the ripple effects of Middle East instability and Russian provocations, these forces could disrupt supply chains, inflate costs and strain our defence commitments under alliances like AUKUS.

Economically, a potential global slowdown amid policy uncertainties and inflation pressures risk dampening demand for our commodities, while domestically, we’re grappling with escalating climate threats, think devastating floods, heatwaves and rising sea levels that could rack up billions in damages and challenge our resilience.

Emerging cyber risks and resource strains add further complexity, underscoring the urgent need for adaptive strategies to safeguard our prosperity and security in an increasingly unpredictable world.

Editor’s note: This is something new we are trialling in addition to our daily defence industry news and strategic policy analysis and thought leadership pieces, please let us know if you like this information, if you have anything to add or would like to see included into our Daily Risk Reports moving forward.