Overview
Melissa Mahle is a senior advisor with Steptoe’s International Trade and Regulatory Compliance Group and leader of the Global Strategic Engagement Team’s analytical team, which produces the Stepwise Risk Outlook. Mahle is a former US intelligence officer with a background in intelligence, foreign policy advising, risk consulting and Middle East issues. She advises clients on political and security risks, crisis management, incident response, after-action reviews and business continuity. She is the author of Denial and Deception: An Insider's View of the CIA from Iran-Contra to 9/11 (Nation Books, 2003) and, on the lighter side, she has authored children's books and served as a Hollywood film consultant.
Stepwise Editor in Chief Anni Coonan sat down with Melissa Mahle as part of the launch of the expanded format for Steptoe’s leading risk publication, Stepwise Risk Outlook.
What geopolitical developments do you believe pose the greatest risk to global stability over the next five years, and why?
We are in a major transition period, with the rules of the old order being thrown out the window, and new rules and relationships being negotiated—not around a table, but on the ground. Changes in the transatlantic relationship are a major part of this transition, as is a shift towards hard power and realpolitik. With any transition comes unpredictability and increased risks of instability; the accelerating rate of change puts players at even more significant risk.
The transatlantic relationship is in flux and will be for the foreseeable future. This is not solely a byproduct of the personal style and policy preferences of US President Donald Trump. Rather, the assumption that US national security strategy de facto prioritizes active involvement and support of European interests over other security priorities no longer holds firm across the aisle. Whereas managing threats originating from Europe dominated the US’ early 20th-century security strategy, Washington is now focused on economic security as a core element of its future national security. Europe is perceived as neither a fundamental threat nor a contributor to the US’ drive towards global economic dominance. It is unclear what the new transatlantic relationship will be. Will the US still see Europe as its go-to partner for global leadership, or will the US gravitate to other partners who are viewed as more relevant, more useful or simply more powerful? Will Europe go its own way, prioritizing partnerships that better align with its political and economic interests?
The rules governing the use of power are also changing. The preference for soft power and consensus-building to shape geopolitics, and the multilateral institutions supporting this approach, are being upended by new preferences for hard power and unilateralism. Unilateral policies supporting economic coercion, military invasion and occupation, and forced regime change of sovereign governments have returned to the geopolitical playbook. Whether this will eventually be normalized or restrained by the international community is not clear, but in the meantime, the weakening of mechanisms to manage disputes could risk destabilization and conflict.
How should businesses and investors adapt their strategies in response to increasing geopolitical uncertainty, particularly around trade, technology, and political risk?
The idea that geopolitics and geoeconomics only concern international businesses has been disproven by the number of external shocks impacting Main Street over the past five years. From the global pandemic, US-China trade tensions, the rise of protectionist industrial policies, the Russia-Ukraine War, restrictions on movement of labor, and most recently the Iran war, businesses big and small have faced disrupted supply chains, new tariff and non-tariff trade barriers, rising costs of raw materials and labor dislocation.
Periods of rapid change create opportunities and risks, along with winners and losers. To stay ahead of the curve, businesses need to maintain strong situational awareness, agility and adept leadership. Watching geopolitical developments is not sufficient; C-suites should think through risks and contingencies, and identify triggers for action as geopolitics shift, impacting business environments, securitization of technology and the movement of peoples and goods.
Which emerging trends are currently underappreciated by policymakers and markets, but could have significant global consequences in the near future?
One set of issues that I am watching is the growing divergence in central banks' policies and the weakening of institutions set up to coordinate policies to manage the global economy. These risks arise because financial markets, trade, and capital flows are highly interconnected, while policy responses become more fragmented.
The greatest danger is not simply that central banks pursue different policies—different economic conditions often require different responses. The risk arises when those differences occur alongside weakened international coordination, making it harder to manage spillovers, respond to crises and maintain confidence in the global financial system. The result can be more volatility, greater financial instability, slower growth and heightened geopolitical tensions.
There are many publications covering international risk. What sets Stepwise Risk Outlook apart as a five-days-a-week publication?
There are more risks than ever with the potential to adversely impact the international trade and business environment. By moving to a publication schedule of five days a week, Stepwise Risk Outlook can track more emerging issues at the intersection of geopolitical intelligence and business risk and provide more frequent analysis on flashpoints on our radar. These include the growing East-West power struggle in the Arctic as warming opens up new shipping lanes and energy exploration, or the hidden chokepoint of Arab Gulf states’ reliance on subsea internet cables amid the AI boom. Ultimately, we seek to expand business leaders’ situational awareness and help them remain a step ahead on emerging risks— to get our analysis in your inbox five days a week, subscribe here.
