In 2026, (geo)political uncertainty will remain a structural feature of global markets, but several specific risks stand out as especially relevant for business leaders.
1. Will the trade truce between the European Union and the United States be maintained?
Transatlantic economic relations have enjoyed relative calm since the July agreement, but that calm is fragile. The latest shock is the US imperial interest in Greenland. In any case, with President Donald Trump back in the White House, few in Brussels should believe that any agreement is truly final. Past experience suggests that policy volatility, not stability, is the baseline expectation. The biggest economic stress point for 2026—aside from the Greenland and Ukraine security issues—is likely to be digital regulation. Europe’s broad digital policy agenda – from data governance and competition rules to AI regulation – runs directly counter to the interests of the current US administration. Washington has already signaled strong opposition and, depending on the direction the EU’s Digital Omnibus package ultimately takes, the dispute could materialize and become unmanageable. This dynamic is playing out with the Ukraine war in the background. The United States will use its support for Europe in this war as a lever of pressure. We will see if the EU assumes support for Ukraine and the defense of digital regulation or, on the contrary, renounces the latter in exchange for delegating the defense of Ukraine to the United States.
2. Will the EU-China clash finally materialize?
Europe and China have been inching toward confrontation for two years, and 2026 could be when rhetoric finally turns into action. China’s export machinery—far from slowing down—continues to expand. Export volumes to the EU have increased even as Brussels has sought to tighten defensive trade instruments. In parallel, Chinese imports from Europe are slowing, putting pressure on European manufacturers, especially in sectors with already tight margins. What makes this dynamic even more explosive is China’s clear ambition to dominate advanced manufacturing sectors, areas in which European companies have historically excelled. From precision machinery to green technologies, Chinese industrial policy is increasingly aimed at capturing more value. The European Commission’s investigations into Chinese “overcapacity,” especially in green industries, reflect a deeper concern that Europe could lose ground in sectors it previously considered safe, such as specialized machine tools. The clearest example is electric vehicles. Chinese manufacturers have made rapid progress in gaining global market share, combining scale, cost efficiency, integrated supply chains and the devaluation of the yuan against the euro. Meanwhile, European automakers struggle with legacy costs and uneven political support for the green transition. As more Chinese electric vehicles enter the EU, political pressure is mounting to impose tariffs or compensatory measures. The EU’s decision in the face of this pressure will be key to defining 2026.
3. Where will the key elections go?
Political rotation will shape the strategic environment as much as economic trends. The November midterm elections in the United States will be closely scrutinized, as they will determine whether the current Administration will have enough support in Congress to advance its domestic and foreign policy objectives, or whether it will be more constrained by the legislature. Although a complete reform of economic policy is not foreseen, the question is whether an unrestricted administration will be more predictable than a coerced one. In Europe, the focus will be on Hungary. A defeat for Prime Minister Viktor Orbán – still unlikely, but increasingly talked about – would drastically alter the internal dynamics of the EU. His departure would eliminate the most obstructive voice in the bloc and could facilitate faster progress on institutional reforms and common foreign policy positions. Further afield, Brazil will also face an important political moment, with presidential elections in October. President Lula’s coalition has been tested, but barring unforeseen surprises, everything indicates that it will manage to maintain political control. For global markets, a stable Brazil would represent an unusual source of predictability, especially in the area of raw materials.
4. Will the EU “circle of fire” deteriorate further?
Europe’s neighborhood remains unstable, and signs suggest that 2026 could worsen the situation. Whether from security threats to the continent or a refugee crisis triggering border closures, the dangers to the continent are evident. The Sahel continues its downward spiral, with state collapse, insurgency and geopolitical competition. European influence has been significantly diminished, replaced by local junta, Russian mercenary structures and fragmentation. Sudan’s brutal conflict shows no signs of abating. External actors—especially the UAE, attracted by gold interests and indirect influences—have entrenched the dynamics of the war. The humanitarian and regional spillover effects are worsening, destabilizing the Red Sea corridor. Meanwhile, the Gaza Strip and Syria remain tinderboxes. Even if major escalations are avoided, the fragility of the existing ceasefires and the involvement of regional powers keep the risk of a renewed conflict high. Ukraine, finally, remains immersed in a war of attrition. kyiv resists, but under increasingly difficult conditions. Western support, although continuous, is now more uncertain than at any time since the war began.
5. Will the AI bubble burst?
Few sectors have generated as much buzz—or capital attraction—as artificial intelligence: valuations, capacity investments, and expectations have reached extraordinary levels. A correction in 2026 would test global financial stability. The United States, despite its innovative leadership, would be especially exposed. Their institutional cushions—the Treasury and the Fed—are not as strong as during previous financial corrections, and global debt remains at historic levels. Policymakers may lack the fiscal or monetary space needed to cushion a hard market landing.
6. Other points of interest to watch
Beyond these major risks, several persistent crises continue to pose threats: the Democratic Republic of the Congo, Myanmar, Venezuela and Kashmir. Each has the potential to intensify, with unpredictable repercussions for regional stability and resource markets. For global companies, 2026 will require not only foresight but strategic resilience. Those who invest early in understanding—and protecting themselves—from these and other changes will be better positioned to face the year.Ángel Saz-Carranza, is director of EsadeGeo – Center for Global Economy and Geopolitics.
