US Chat Leaks Highlight Europe's Risk Management Blind Spot

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US Chat Leaks Highlight Europe's Risk Management Blind Spot

Management of risks around Saudi oil infrastructure? A “priority”. The European states? “Pathetic freeloaders”. The cost of American geostrategy? The Eurozone’s to pay. The unprecedented leaks of March 24th reveal the disturbing substance behind months of rhetoric and present a dismal outlook for European business leaders struggling to reorient themselves in Trump’s new world.

US national security advisor Michael Waltz said it best: “if Europe doesn’t remunerate, then what? … [T]here needs to be some further economic gain extracted in return”. In unwittingly adding journalist Jeffrey Goldberg to a private group chat discussing plans to strike Houthi targets in Yemen, the true extent of the Trump administration’s disdain for the European project has been exposed. Levying the cost of securing the Gulf of Aden on the EU is not merely an economic take but a strategic move to bolster a fierce brand of national capitalism: here, ‘extraction’ is the key word. Long-term thinking by chief risk officers across the bloc is yet to catch up with the reality of US policy towards Europe, and it is precisely this lag that will cause serious challenges to any firm attempting to build effective risk management into their business strategy. In other words, the transatlantic special relationship is something worse than dead: it’s a walking corpse.

Until recently, European industry has had little need to consider initiatives that mitigate strategic dependency risks at the macro level – that is, how crucial value chains, supply networks, and third parties silently suffer from their inability to survive when a parent state makes an extraordinary policy U-turn. Even as the second trade war ignites, various European business leaders have refused to adjust their long-term risk thinking. Many are instead opting to maintain outdated notions of ‘riding out the temporary political storm’ rather than take potentially costly action. In hastily assuming a natural return to predictable trade and investment dynamics, this rationale risks harming markets as systemic shifts in economic statecraft and back-to-back one-term administrations worsen geoeconomic oscillation. In plain English: policy flip-flopping. This has already been seen – with federal endorsements of climate goals in constant flux, long-term corporate strategies across voluntary carbon markets have suffered amidst the United States’s entry (2016), exit (2017), reentry (2021) and re-exit (2025) of the Paris Climate Agreement. There is little evidence to indicate that this cycle of short-term thinking is slowing.

European markets must embrace a risk strategy that insulates their supply networks and operational resilience plans against economic policies with ever-shortening shelf lives. Reactionary mitigation measures alone are not sustainable. Moreover, these strategies must align with wider initiatives of untethering. And while the weakened competitiveness and ravaging uncertainty induced by Trump’s economic statecraft will disrupt up to $28 billion in exports, some of the worst risks will arise out of mitigation strategies that still assume a consistent US backing of the Eurozone.

Instead, businesses must integrate strategic redundancy and regulatory hedging, and start thinking seriously about nearshoring plans to counteract the instability of transatlantic trade relationships and the volatility of US policy swings. The attitudes revealed in the leaks should be the key takeaway for European firms and must amount to one clear revelation – geopolitical risk management practices rot from the inside.

This is not a political storm. It’s geoeconomic climate change.

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Analyst

Tom is an analyst in the Verdantix Risk Management practice. Prior to joining Verdantix, he worked with a think tank where he researched small-scale southeast Asian territorial disputes. He holds a Master's degree in Geopolitics from the University of Sussex, where he specialised in contemporary China - Taiwan relations.