Australia must tread carefully as the Trump presidency signals a more assertive foreign policy, Marsh says.

Its annual Political Risk Map, issued last week but produced before the highly publicised telephone confrontation between the new US President and Australian Prime Minister Malcolm Turnbull, says multinational companies face rising political and economic risks as the US adopts Mr Trump’s “America First” policy.

“Australia epitomises the line that must be walked [this year] by many stable countries,” the Marsh report says. “It has a strong economic relationship with China, and deep security ties to the US.

“This may lead to greater friction between the US and its main trading partners and allies, as well as with its geopolitical rivals.”

The report says Mr Trump’s election and the UK’s vote to leave the European Union last year rocked the status quo and underscore rising support for anti-establishment forces.

Surges in immigration, the knock-on effects of global financial crises and increased terror threats are other factors that will influence the political order.

“Both the UK’s vote to leave the EU and President Trump’s victory defied conventional wisdom, as the status quo option or candidate failed to prevail,” Marsh says.

“As many countries shift their focus inward and become more protectionist, it appears we may have hit ‘peak globalisation’, potentially stifling global economic trade moving forward.”