Economic Warfare and Supply Chain Vulnerabilities: How Modern Border Disputes Threaten Global Business Continuity

Abstract

Border disputes, once analysed almost exclusively as military and diplomatic phenomena, have become one of the principal transmission channels through which states wage economic warfare against one another and, in the process, destabilise global commerce. This paper examines how contemporary territorial and maritime disputes — the Red Sea corridor confrontation involving the Houthi movement, the Sino-Indian Himalayan border stand-off, the Russia-Ukraine war and its Black Sea dimension, and the Taiwan Strait semiconductor rivalry — have been converted into instruments of coercive statecraft with measurable consequences for global supply chains and business continuity. Drawing on a structured qualitative synthesis of governmental reports, peer-reviewed literature, industry surveys and financial-market data, the paper documents that global trade-restriction activity more than tripled between 2019 and 2024 [3], that Red Sea shipping disruptions forced roughly three-quarters of United States- and United Kingdom-affiliated vessels to reroute around the Cape of Good Hope [14], that Sino-Indian bilateral trade patterns shifted sharply in the wake of the 2020 Galwan Valley clash, and that semiconductor export controls have reorganised a $631 billion global industry along geopolitical rather than purely economic lines. The analysis further shows that corporate responses — nearshoring, dual sourcing, inventory buffering and regionalisation — remain partial and unevenly adopted, with McKinsey survey data indicating that momentum behind supply chain resilience investment plateaued even as disruption frequency increased. The paper triangulates realist, liberal-institutionalist, Global South and corporate risk-management perspectives to argue that economic warfare conducted through border disputes imposes disproportionate costs on firms and states least equipped to absorb them, and it concludes with a strategic framework for anticipatory business continuity planning under conditions of weaponised geography.