Cold War Two and the New Geopolitical Economy
Strategic Risks and Opportunities for MHEDA Members
By Jason Schenker
THE GLOBAL ECONOMY has entered Cold War Two®, which is a high-stakes era of geopolitical rivalry reshaping trade, technology and supply chains. For MHEDA members, these forces are not distant headlines, but immediate pressures as well as powerful opportunities that can determine profitability, resilience and long-term growth.
Cold War Two® is not a hypothetical future. It is the most important factor impacting our present reality by reshaping trade, technology, energy and supply chains in ways that will directly affect the material handling industry and MHEDA members. In my virtual keynote for MHEDA, I explored how Cold War Two® is impacting and shaping the business landscape and what strategic moves members can make to manage risk and capture opportunity.
What Is Cold War Two®?
Cold War Two® began on Feb. 4, 2022, when China and Russia issued a joint statement at the Beijing Olympics declaring “no limit” to their cooperation. Less than three weeks later, Russia invaded Ukraine. Since then, geopolitical competition has hardened into a structured, long-term rivalry, with the United States and its allies (e.g., NATO, Japan, South Korea, Israel, Australia, etc.) aligned against a bloc led by China, Russia, Iran and North Korea.
This rivalry is playing out across multiple dimensions, including the following:
• Trade and tariffs as tools of economic leverage and deterrence.
• Technological decoupling, with a “technological iron curtain” forming between the U.S. and China.
• Energy realignment, including the race for critical minerals and reliable energy supply chains.
• Proxy conflicts in Europe, the Middle East and potentially Taiwan.
• Information warfare, including social media, AI-driven disinformation and cyberattacks that are used to destabilize adversaries.
For industries like material handling, manufacturing, supply chain, mining, energy and heavy industry, these shifts present both serious challenges and new avenues for growth.
The New Geopolitical Economy and MHEDA Members
The material handling sector sits at the intersection of supply chain resilience, industrial productivity and trade infrastructure, which are key areas being reshaped by Cold War Two®.
Three of the most important forces shaping the present and the future stand out:
- Trade Barriers and Tariffs – Tariffs have moved from being temporary policy levers to long-term strategic tools. As I have often written in recent months, the U.S. is using tariffs as both “sword and shield” to secure domestic manufacturing, punish adversaries and pressure allies for concessions This means MHEDA members could face shifts in cost structures, supplier viability and customer demand depending on tariff policy changes. A U.S. crackdown on foreign transshipments intended to facilitate the evasion of U.S. tariffs is also underway.
- Reshoring, Nearshoring and Friendshoring – A defining trend is the realignment of global supply chains away from China. Manufacturing of highvalue, strategically critical goods like semiconductors, industrial equipment and battery systems is being reshored to the U.S. and its allies. This realignment creates opportunities for the material handling industry to supply equipment, automation and logistics solutions for new domestic and regional facilities. The potential future opportunities for nearshoring in Canada and Mexico are also significant. However, the prospects for achieving those opportunities will likely depend on NAFTA and USMCA coordination to restrict transshipments – especially transshipments of Chinese goods – that are intended to evade U.S. tariffs.
- Critical Minerals and Energy Security – Energy and raw materials are now treated as national security assets. From lithium and cobalt for battery production to steel and aluminum for manufacturing, countries are racing to secure supply chains that are independent of China. For MHEDA members, this could mean demand growth from sectors investing in domestic mining, refining and energy infrastructure. However, it will be crucial to manage potential commodity price volatility and extended equipment lead times.
Strategic Risks in Cold War Two®
While there are significant opportunities for MHEDA members ahead, Cold War Two® also introduces fractal risk, whereby even minor disruptions could cascade through interconnected systems, amplifying impacts.
For MHEDA members, four of the biggest risks to business operations include:
- Supply Chain Disruptions – Militarized shipping lanes (e.g., Red Sea, South China Sea, Strait of Hormuz) can cause freight delays, insurance spikes and raw material shortages.
- Inflationary Pressures – Reshoring to higher-cost locations and tariff-driven price increases could affect capital project budgets.
- Technology Restrictions – Export controls on dualuse tech (e.g., robotics, AI, semiconductors) may limit access to advanced automation tools sourced from or incorporating Chinese components.
- Geopolitical Contagion – Multiple conflicts could flare simultaneously, including Ukraine, Taiwan, the Middle East and the Korean Peninsula, which could stretch global logistics to the breaking point, while also weighing on financial market stability.
These risks are serious, but they are not reasons for paralysis. In fact, these strategic risks underscore the imperative for MHEDA members to adapt early and build resilience before crises escalate.
The MHEDA Advantage in an Era of Uncertainty
Material handling is a foundational enabler of industrial productivity and economic resilience. In Cold War Two®, the U.S. and allied nations will increasingly prioritize domestic and regional production capacity. MHEDA members who can deliver flexible, automated and resilient solutions will be essential partners in this transformation.
Of course, risks are significant, including geopolitical tensions, supply disruptions and inflationary pressures. But the opportunities are also significant. Those who anticipate change and position strategically will not just survive this era of uncertainty; they will shape it.
Looking Ahead
Cold War Two® is here, and it is poised to define the next decade’s business climate in the way that globalization defined the last. For MHEDA members, there are reasons to be cautiously optimistic, and many of the member companies I often speak with are moving ahead to seize opportunities in a shifting environment.
The call to action for material handling companies and MHEDA members is clear: strengthen resilience, seize opportunity and lead in building secure, efficient and innovative supply chains of the future.
In my virtual keynote this fall, I dove deeper into how to connect the dots between grand strategy, industrial policy and material handling demand. I also discussed how to anticipate future disruptions before they upend material handling company operations. Finally, I shared actionable steps to align material handling businesses with the geopolitical realities shaping our industry.
The material handling sector has always adapted to meet the moment. In Cold War Two®, adaptation is not optional. It is the only path to long-term success.
About the Author
Jason Schenker is a futurist, economist and bestselling author who helps leaders prepare for the future. He is President of Prestige Economics and Chairman of The Futurist Institute. Ranked the world’s #1 forecaster in 31 categories by Bloomberg, Jason has written 37 books and reached nearly 1.5 million learners through his LinkedIn courses.
Article Takeaways
- Geopolitical Shifts Impacting Industry. Cold War Two® is reshaping global trade, technology and supply chains, creating both risks and opportunities for MHEDA members.
- Emerging Growth Drivers. Trends like tariffs, reshoring and critical mineral security are driving demand for material handling solutions in new domestic and regional facilities.
- Adapting for Long-Term Success. To succeed in this era of uncertainty, MHEDA members must strengthen resilience, adapt to geopolitical shifts and position themselves as essential partners in building secure, efficient supply chains.
