CommBank Geo-Economics Analysis Explains How Global Power Shapes Markets

CommBank Senior Geo-Economic Analyst Madison Cartwright has published new analysis explaining how global power dynamics shape markets. The report, published on March 20, 2026, challenges the assumption that markets operate independently of politics, arguing instead that government policy shapes all facets of how businesses interact across borders.

The Core Argument

"We often like to think of markets as happening external to politics," Cartwright said in the report. "But in reality, policy from government shapes all facets of how market actors interact with each other, especially if they're going across borders."

The analysis highlights three key mechanisms through which governments influence markets: trade rules, alliances, and sanctions. Each plays a role in determining which companies can access which markets, at what cost, and under what conditions.

Trade Rules

Trade rules — tariffs, quotas, regulatory standards — are the most visible way governments shape markets. Recent examples include Trump's Section 301 investigations targeting China, Vietnam, and the EU, and the Australia-EU free trade agreement aimed at diversifying supply chains.

These rules don't just affect prices; they determine market access. A company excluded from a major market due to tariffs or regulatory barriers faces a fundamentally different competitive landscape than one with open access.

Alliances

Alliances — formal agreements like NATO, AUKUS, or the Quad — create zones of privileged economic interaction. Countries within an alliance share intelligence, coordinate policy, and often grant preferential market access to each other's businesses.

For businesses, operating within an allied bloc offers advantages: predictable rules, legal protections, and strategic support. Operating outside that bloc — or worse, being aligned with a rival — creates risks and barriers.

Sanctions

Sanctions are the most direct form of geo-economic power. By cutting off access to financial systems, technology, or markets, governments can cripple businesses and entire economies. Recent examples include Western sanctions on Russia and U.S. restrictions on Chinese tech companies.

Cartwright's analysis emphasizes that sanctions don't just affect the target — they reshape global supply chains as businesses scramble to comply. Companies must choose sides, restructure operations, and accept higher costs to avoid violating sanctions regimes.

The U.S.-China Factor

The report's timing is significant. Geo-economic tensions between the U.S. and China are intensifying, forcing businesses to navigate an increasingly fragmented global system. Companies can no longer assume frictionless cross-border commerce — they must account for strategic decoupling, export controls, and investment restrictions.

For Australia, caught between its security ally (the U.S.) and largest trading partner (China), the geo-economic environment is particularly complex. Businesses must balance commercial interests with strategic considerations, often at significant cost.

What It Means for Business

Cartwright's analysis carries practical implications. Businesses can no longer treat geopolitics as background noise. Strategic considerations — which countries to operate in, which supply chains to build, which partners to trust — are now central to commercial decision-making.

The report suggests businesses should scenario-plan for further geo-economic fragmentation. What happens if U.S.-China tensions escalate? What if sanctions expand? What if new trade blocs emerge? Companies that prepare for these scenarios will be better positioned than those assuming stability.

The Broader Trend

CommBank's geo-economics analysis reflects a broader shift in how financial institutions and businesses think about risk. Traditional economic analysis focused on interest rates, inflation, and market dynamics. Now, geopolitical risk is equally important — and in some cases, more important.

For investors, policymakers, and business leaders, the message is clear: markets and politics are inseparable. Ignoring that reality is no longer an option.