Structural Divergence of the Global Economy Under Geopolitical Shocks: New Growth Logic for North America Under AI Opportunities and Supply Chain Restructuring

New Paradigm for the Global Economy Under Structural Shocks: From Resilience to Divergence

The global economy has shown remarkable resilience after a series of cyclical shocks, but this resilience is being eroded by deeper structural risks. According to EY-Parthenon's mid-year outlook, the global economy is shifting from a relatively synchronized growth track to a new landscape characterized by fragmentation and structural divergence. The core drivers of this divergence are no longer just cyclical changes in demand, but are shaped by "layered supply shocks" resulting from the superposition of geopolitical conflicts, trade barriers, and energy security concerns.

Key Observation One: The "Diminishing Returns" of Growth and Regional Concentration

The global economic growth rate is projected to slow from 3.4% in 2025 to 2.9% in 2026, indicating a weakening of the global expansion momentum. This slowdown is not caused by a single factor but by the combined effect of multiple elements: the squeeze on real income from high inflation, geopolitical risks in the global economy, and the diminishing returns of population aging and productivity gains in developed economies. In this context, growth is no longer universal but highly concentrated in a few driving factors: the US economy currently exhibits strong resilience, thanks to sustained support from high-net-worth consumers and AI-driven capital expenditure, but this concentration also increases its sensitivity to internal shocks.

Key Observation Two: The Paradox of AI as Both "Risk Hedge" and "Growth Accelerator"

The wave of artificial intelligence is undoubtedly the most certain structural opportunity in the current economy. AI investment is playing a dual role: on one hand, it provides the economy with important "risk hedging" capabilities by offsetting efficiency losses from geopolitics and inflation through increased productivity potential; on the other hand, it is also becoming a new growth accelerator. However, this acceleration is not risk-free. The massive demand from AI for key inputs such as energy, semiconductors, and data centers is, in turn, exacerbating cost pressures and potential supply bottlenecks in these areas. Therefore, the opportunity presented by AI and the resource bottlenecks it brings exist in a complex relationship that requires fine management. Companies must plan for supply chain security in key input areas simultaneously while leveraging AI to enhance efficiency.

Key Observation Three: The Acceleration of Supply Chain "Reshoring" and "Friend-shoring"

The trend of fragmented trade policies, particularly the increasing normalization of tariffs and export control policies, is forcing global enterprises to re-evaluate their supply chain layout logic.Core Observation Three: Acceleration of Supply Chain "Backflow" and "Friendshoring"

The trend of trade policy fragmentation, especially the increasing normalization of tariffs and export controls, is forcing global enterprises to re-evaluate their supply chain layout logic. What we are witnessing is not simple "de-globalization," but a more strategic "regional restructuring." "Friendshoring" and supply chain "nearshoring" are evolving from strategic concepts into rigid operational requirements. This directly drives a significant increase in manufacturing and key technology investment in North America (US, Canada, Mexico), particularly in semiconductors, critical minerals, and energy security. This restructuring means that corporate investment decisions will no longer be based solely on the lowest cost principle, but on minimizing geopolitical risk and maximizing policy incentives.

Redefining the North American Regional Competitive Landscape

In the North American regional competition, the focus of growth will shift from mere scale expansion to competition for "strategic positioning." The growth driver for the US economy will become increasingly dependent on its leadership in innovation under the dominance of AI technology. Neighboring countries like Mexico will transition from traditional low-cost labor exporters into key "manufacturing hubs" and "supply chain nodes," benefiting from the regional integration formed under the USMCA framework. Canada may continue to maintain its strategic position in clean technology and resources, becoming a specific high-value region in the energy transition.

Divergent Growth Paths Across Global Regions

Besides North America, the growth paths in other global regions also show clear divergence:

• Eurozone: Growth expectations face greater downward pressure due to geopolitical conflicts and inflationary pressures; the penetration rate of AI investment lags significantly behind the US, and economic recovery depends on fiscal stimulus and defensive spending (such as defense expenditures).
• India: As a growth engine in emerging markets, it continues to maintain rapid expansion momentum, benefiting from strong domestic demand and favorable aspects of some trade policies, making it a major growth pole in the global economic structure adjustment.
• Emerging Markets: Overall growth remains constrained by structural factors, but markets like India demonstrate strong resilience to shocks through their infrastructure and service sector.

Deeper Implications for Corporate Strategy and Investment

What does this mean for businesses?

Enterprises must shift from "pursuing maximum efficiency" to "building resilient networks." This means that at the strategic level, technological innovation (such as the deep application of AI) and geographical flexibility of operational layout must be considered in parallel. The investment focus will shift from single-cost optimization to "risk hedging investment," meaning making forward-looking arrangements in key technology and supply chain segments to withstand severe fluctuations in geopolitics and energy prices. Failed strategies will be those that rely too heavily on a single, fragile globalization model.

What does this mean for investors?The logic of capital flow is undergoing a fundamental change. Investors will place greater focus on "policy tailwinds" (such as the IRA, CHIPS Act, etc.) and "supply chain security premiums" for high-growth valuations. Funds will accelerate their tilt towards companies that can effectively manage AI investments while achieving regional layouts. For investors, identifying those who can not only use AI to improve efficiency but also apply AI to build more resilient physical infrastructure and supply chains will be key to capturing future returns.

What does this mean for the industry chain?

The value chain of the industry is undergoing a "decentralization" and "reorganization." The traditional model of global division pursuing extreme low cost is being replaced by a new model of "high resilience and high security." This requires upstream suppliers, intermediate links, and downstream manufacturers to establish tighter, verifiable regional collaboration systems to ensure self-reliance in key technologies and stable supply of critical resources.

Key Observations and Long-Term Trend Outlook

Key Observations: 1. Internalization of Risk Premiums: Geopolitical risks have become internalized as core variables in corporate operating costs and investment decisions, requiring companies to incorporate "political risk" into traditional financial models. 2. The "Double-Edged Sword" Effect of AI: AI is central to boosting productivity, but its concentrated demand for key elements like energy and semiconductors is creating a mutual constraint with bottlenecks in the industrial structure. 3. "Institutionalization" of Regional Competition: Competition in the North American region will no longer be a simple contest for market share, but an institutional struggle centered around industrial policy, talent mobility, and critical infrastructure development.

Long-Term Trend Outlook (Next 3-5 Years):

In the coming years, the backdrop of the global economy will be "high volatility and high structural reshaping." We expect North America to continue consolidating its position as a hub for AI innovation and high-value capital, but its growth stability and sustainability will be long-term constrained by geopolitical uncertainties. The global supply chain will accelerate its evolution towards "regional clustering," forming several interdependent yet competitive economic entities. Successful companies will be those that can deeply integrate AI technology with regional supply chains through strategic restructuring, simultaneously enhancing technological leadership and operational resilience.