The recent worsening of relationships between countries led to a drastic reduction in firms’ foreign investment, which has worsened the economic situation in regions that rely on foreign investment. This project examines when and why firms reduce investments and what policymakers can do to avert these reductions, by examining three dimensions of geopolitical tensions: (1) how tensions create spillovers for third, noninvolved countries, (2) how supranational lobbying (i.e., EU) may mitigate the effect of tensions within an economic union, and (3) whether nationalistic voting in municipalities worsens the effects of tensions. This project supports policymakers and firms in battling deglobalization.