For North American label converters large and small, the daily occurrences across the globe will play a large role in impacting their businesses. According to Alex Chausovsky, president, 3DM Consulting, and his brother, Eugene Chausovsky, senior director for Analytical Development & Training, New Lines Institute, the international upheaval we’re experiencing now is the new reality – and it’s here to stay. The brothers addressed numerous economic topics at the TLMI Converter Leadership Meeting, which took place April 12-14, 2026, in Clearwater Beach, FL, USA.

The best advice for label converters – have a plan in place. The industry has adapted quite well to numerous challenges over the better part of the last decade. However, uncertainty necessitates having more plans in place.

“From a strategic decision-making perspective, the game has changed in a very meaningful way,” remarked Alex. “In this complex landscape, you have to have a variety of plans to ready go to depending on what’s happening in the world around you.”

Alex adds that statistics show corporate attention to geopolitics has waned somewhat since peaking in early 2022. However, the global political risk remains elevated.

Eugene Chausovsky described increasing competitiveness with China, although the United States boasts several key advantages. “The US is most focused on China as geopolitical adversary, looking to overtake US as leading global power,” said Eugene. “But China doesn’t have beneficial geography – it borders over a dozen countries – and its competing countries have been India and Russia, historically. China does have a large population, but from a GDP per capita standpoint, China is far behind US.

“China has to import a lot of its energy resources,” added Eugene. “It’s one of the most vulnerable to geopolitical disruptions.”

Meanwhile, Russia is far below both the US and China as a world power, the brothers noted. Russia contends with open land borders with many countries that have historically been their adversaries.

From a European perspective, the continent collectively boasts the largest economy with 27 members. The EU has a lot of influence over regulatory process because of large size of market. However, there are no individual leaders like there are in the US, China, and Russia. Europe is less active in key geopolitical issues because there is no central force. Plus, 27 member companies have to agree on a given issue.

The war in the Middle East and a continued emphasis on tariffs will drive major price increases in the future, Alex remarked.

By the numbers

When comparing the US and China, the former boasts a $31.8 trillion GDP. On the contrary, China sits at $20.71 trillion.

“We are the dominant economic force. Even after decades of double digit growth, China is nowhere near surpassing the US,” stated Alex. “Those are the two leading economic players, comprising close to 50% of global GDP. Europe, combined, has a similar sized economy to the US. These are the countries that matter and set policy for the global economy. For example, Russia, at $2.5 trillion, is smaller than the economy of the greater NYC area.”

The US has maintained market share of the economy over the last 50 years – 26% of global economy. Japan, for example, peaked at 18% in the mid-1990s and now sits at 4%.

“President Trump is looking for concessions from trade partners and to take advantage of the fact the US is the dominant market share player,” said Alex. “Future growth of US market share is top of mind for Trump’s agenda right now.”

From a military perspective, the US remains dominant in this area, as well. US military spending grew by 5.7% annually in 2024, while China’s grew an estimated 7%. US military spending sits at $997 billion compared to China’s $314 billion. Russia ranks behind them at $149 billion.

In the future, other countries will continue to look to the US. “While it is true the dollar’s dominance has been somewhat eroded over the last 20-30 years, the other currencies are not benefiting,” stated Alex. Other countries are benefiting because they want to trade in their own currency. Countries rush to the dollar and we are still the safe haven in the world in terms of geopolitical risk.

“I do believe the devaluation of the dollar vs. other foreign currencies will continue in the future, simply because of the change in currency valuation over time,” added Alex.

Analyzing tariffs and inflation

The US is still dealing with unpredictability due to tariffs, which take time to make an impact.

“Tariffs are still not fully baked into the system,” said Alex. “Increasingly companies will look to pass on the impact of tariffs to end customers. On average, tariffs take 9-18 months to work their way through the system.

“Tariffs are not going away,” added Alex. “They will evolve and even accelerate over the course of 2026. You need to look at the cost of goods sold and see what levers are available to you and how you can deal with that. The profit line is being eroded over several pressure points, with tariffs being in the lead.”

Inflation is expected to trend higher, too – likely range in the 3-4% range. This is likely not the last price increase you’re going to see, either.

“Even if the war were to end today, we’d still have two years of impact that would still be felt from that,” stated Alex. “There will be upside pressure from inflation into 2027. But there is upside potential driven by tariffs and the war. If the war ends soon, the impact will be limited. Inflation could rise to 5-6% range if they can’t agree at the negotiating table.”

Despite these challenges, the US remains in an advantageous position. “The US economy is incredibly resilient,” commented Alex. “The latest data through 2025 states the US economy is at a record high, and it’s never been more robust than it is today, despite all the headwinds.”

Inflation adjusted GDP is at 2.2% growth in the economy, which is about average, the brothers remarked. Meanwhile, Q4 of 2025 was 2.2% higher than Q4 of 2024. “We are not in a recession and not imminently headed for a recession,” concluded Alex.

Looking to the future

According to the Chausovskys, leading indicators show now is not the time to be investing in your business. “What we’re seeing is evidence of stagnant economy,” said Alex. “You have to be data driven. You can’t let emotions or anxieties dictate your decisions. Reinforce supply chains for ongoing geopolitical upheaval. This complex environment is going to exist for some time to come. Prepare for rising industrial demand, but plan for a variety of scenarios. If you talk to your supply chain partners once every three months, make it monthly.”

The cost of business will continue to increase, too. Cost of labor is expected to continue to increase by 4% YoY.

The brothers added that immigration policy will play a key role going forward. “Illegal immigration has been stopped, but there is a need to remedy legal immigration to foster population growth,” noted Alex.