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Geopolitics
When trade walls rise: Lessons from Finnish companies on navigating market collapse
When trade barriers rise and key markets collapse, companies face tough strategic decisions. Lessons from Finnish industry offer a practical playbook for navigating exit under uncertainty.
In 1917, Finnish paper producers – today’s UPM-Kymmene and Metsä Group – faced a sudden existential crisis. The Bolshevik Revolution cut off access to Tsarist Russia, their largest export market. Rather than wait for the situation to stabilize, executives made the bold decision to pivot westward, reorienting their businesses toward Europe.
Seventy years later, Finnish shipbuilders, part of what would later become Meyer Turku, confronted a similar rupture. With the collapse of the Soviet Union, their principal market disintegrated. Yet despite early warning signs, they hesitated, pinned hopes on fragile trade agreements, and endured a painful decade of restructuring.
Why did one industry adapt quickly while the other stumbled? Their contrasting experiences offer critical lessons for today’s leaders – particularly as protectionism resurfaces in the United States.
The evolving threat of protectionism
The revival of tariffs under the Trump administration’s agenda has placed export-oriented businesses under renewed pressure. Markets may not close overnight, but rising trade barriers and policy unpredictability can steadily erode competitiveness.
Understanding how past executives navigated – or failed to navigate – sudden market closures provides a strategic advantage. The decisions leaders make now, in response to early warning signs, will determine whether their organizations pivot successfully – or are forced into painful restructurings later.
This article distills three historical lessons to help executives manage high-stakes strategic exits under uncertainty.
Today’s executives must look beyond quarterly reports and monitor emerging policy debates, trade negotiations, and rhetoric from key political actors.
1. Developing the geopolitical ‘sonar’ – not just ‘radar’
Macroeconomic forecasts and sector-specific reports are helpful, but they often miss deeper political undercurrents. Finnish paper executives possessed what we call a ‘geopolitical sonar’ – an ability to detect early signals and underlying drivers of major trends. Paper producers recognized the far-reaching implications of the Bolshevik takeover and concluded, “We will be exporting to the West in the future,” even though the costs of reorienting their business were substantial.
In contrast, shipbuilders in 1987 also saw change coming. But executives predicted: “Perestroika will bring change, but not in our lifetime.” That misreading – failure of geopolitical sonar – proved costly.
Today’s executives must look beyond quarterly reports and monitor emerging policy debates, trade negotiations, and rhetoric from key political actors. Developing a geopolitical sonar is what allows firms to act before the full picture is clear.
2. Turn uncertainty into a predictable future through peer networks
Even when executives see disruption coming, uncertainty can paralyze strategic choices. This is where peer networks play a critical role.
In early 20th-century Finland, paper producers coordinated strategic change through business associations. Executives exchanged insights, aligned strategies, and even took on quasi-governmental roles to negotiate new trade deals, as Finland’s state institutions were still developing.
In contrast, during the collapse of the Soviet Union, top executives in Finnish shipbuilding struggled to envision a future without the Soviet Union. The political and business elite remained tied to the idea that the Soviet Union – and the profitable trade that came with it – would endure. When it didn’t, they were caught off guard.
Executives today should engage their networks not just for benchmarking, but to build shared understanding and momentum for difficult strategic moves. Uncertainty is easier to manage when others are navigating it with you.
Finnish shipbuilders had long enjoyed near-privileged access to Soviet markets, which led them to tailor their output to Soviet specifications.
3. Industry constraints matter but should not determine outcomes
Not all industries face the same constraints when a key market closes. Finnish paper producers offered products in global demand and found new markets relatively quickly.
In contrast, Finnish shipbuilders had long enjoyed near-privileged access to Soviet markets, which led them to tailor their output to Soviet specifications. Icebreakers, for instance, attracted almost no buyers elsewhere, and other lines, such as Wärtsilä’s passenger ships for Western markets, needed investment to compete in a much tougher environment.
For executives responding to today’s trade threats, a key step is a realistic assessment of strategic flexibility. Can your core offerings find traction in alternative markets? If not, what capabilities need to be developed – or divested – to make that possible?
Strategic exits are painful – but they must be kept on the boardroom agenda.
Exit before you are forced to
A foreign market doesn’t have to collapse overnight for the risk to be real. Trade barriers can erode competitiveness gradually, one step at a time.
Strategic exits are painful – but they must be kept on the boardroom agenda. Leaders should regularly stress-test exit scenarios and discuss them with the board as deliberately as any other contingency plan.
History shows that companies that exit deliberately, rather than being forced out, are better positioned to rebuild and thrive. In our examples, one exit was a conscious strategic pivot; the other was a delayed reaction to external collapse.
Yet even those who stumble at first can reinvent themselves. Finnish shipbuilders eventually emerged as global leaders in Arctic technologies, marine engines, and cruise ship construction.
In times of disruption, the winners will be those who act early, think collectively, and adapt without hesitation.
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