Strategic Decision-Making in the Face of Global Trade Constraints

Abstract

Cross-border trade’s risk assessment has changed significantly because of increasing tensions among countries, reversing protective policies and breaking up global trade supply chains created during the pandemic as well as changing foreign currency rates. The frameworks for making strategic decisions used when trade was relatively uninterrupted by these types of issues are largely ineffective in managing the multiple issues. The authors of this paper present an integrated strategic decision-making trade framework, using four integrated strategic layers, drawing on dynamic capabilities’ theory, global value chain analysis, and real-time commercial market intelligence [4]. Using data from the World Trade Organization (2024) and the Baker, Bloom, and Davis Economic Policy Uncertainty Index, they show that firms whose governance structures incorporate adaptive governance principles, scenario-planning capabilities, and delegation of decision-making authority outperformed firms that do not have such practices systematically during periods of trade constraints. Finally, this article provides a roadmap of practical implementation for senior trade executives and strategy directors.