2026: A challenging geopolitical landscape for businesses

From the military intervention in Venezuela to the volatility of US politics and China’s growing trade power, the world is anything but predictable as we move into 2026. The best-laid corporate plans are at risk of disruption, and the new normal for executives and policymakers is to consistently navigate a turbulent geopolitical landscape.

In a recent analysis for Forbes, Angel Saz-Carranza, director of the Esade Center for Global Economy and Geopolitics (EsadeGeo), highlighted five geopolitical threats that will influence corporate strategy in the year ahead. 

1. Chinese threat to EU manufacturing

China’s exports continue to grow, which in turn pressures European manufacturers and drives Brussels to enhance defensive trade tools. “China has a clear ambition to dominate advanced manufacturing sectors—areas where European firms have historically excelled,” notes Saz-Carranza. Precision machinery, green tech and electric vehicles are illustrative battlegrounds. Chinese EV producers have been successful in securing a global market share, whereas European automakers grapple with legacy cost structures and policy uncertainty. 

Under its ReSourceEU programme, Brussels has allocated €3 billion to curb dependency on Chinese raw materials. Olivier Andriès, president of France’s GIFAS aerospace association, put it starkly: “There is a trend towards the weaponization of the supply chain,” he said, referring to EU dependencies on critical raw materials such as rare earths from China.

Industrial competitiveness and geopolitics are now intertwined. As the World Economic Forum noted, fracturing supply chains and geopolitical tensions rank among the most serious business risks for the years to come. Failure of companies to adapt could diminish their ability to remain competitive.

2. Will the US remain a trade ally?

The July 2025 deal on tariffs between the US and the EU may have paused trade tensions, but in Brussels, many analysts see the detente as fragile. “What past experience has shown is that we can expect US policies to be volatile rather than stable,” notes Saz-Carranza.

Disruption to amicable EU-US trade relations may come as a result of Europe pushing for digital sovereignty and rolling out a new digital policy to help control and govern data management and the development and use of AI. This is at odds with the desires of the US government.

The geopolitical arena is not just about tariffs and trade flows, but also about countries competing to govern data and digital markets. Businesses operating in both markets must keep up with changing compliance rules and anticipate not only what rules may apply, but also how they will be enforced.

According to recent executive surveys, regulatory inconsistency is cited as a leading business concern, with companies experiencing it as detrimental to growth. The World Economic Forum survey also found that doing business is getting tougher.

3. Leadership changes and political volatility

The US midterm elections will be under the spotlight this November. While they will not change the president, the outcome will influence the direction of both domestic and foreign policy by determining how much power President Trump’s party has in Congress.

Perhaps a US administration with fewer internal restraints will be more predictable? Volatility in policy makes long-term investment decisions riskier, and surveys show that political risk has climbed into the top three corporate threats globally. Executives increasingly view political stability as central to supply-chain and investment planning. 

Back in Europe, Hungary’s upcoming April elections could change the balance of power within the EU. Current Prime Minister Viktor Orbán has often blocked or slowed EU reforms and foreign policy initiatives, particularly on sanctions and support for Ukraine. If he loses power, his ability to veto these decisions would disappear—potentially opening the way for smoother EU action.

Beyond the EU, Brazil’s presidential race compounds the geopolitical picture. Brazil is a country with major exports such as food, minerals and energy; investors feel more confident when politics are stable. Here, commodity markets and investor confidence hinge on political continuity.

None of these elections will happen in isolation. The ripple effects will be felt globally, influencing global capital flows and strategic decisions across regions.

4. Europe: Surrounded by uncertainty

The fringes of Europe are also unstable. From the Sahel’s crumbling states to ongoing conflicts in Sudan, Syria and Gaza, the context is one of deteriorating security that can directly impact businesses.

In Ukraine, the war remains unresolved and continues to disrupt supply chains, energy markets and investor confidence. In the Sahel, the waning influence of European diplomacy and the rise of paramilitary groups complicates trade through corridors that were once secure.

Regional instability flows outward: refugee movements, disrupted logistics and heightened costs for insurance and security services. The WEF Global Risks Report 2026 has emphasized that state-based armed conflict remains among the most serious global risks—in both humanitarian and economic terms. 

Businesses with operations or supply chains in these regions may find that localized unrest can have global impacts.

5. Will AI live up to the hype?

Artificial intelligence is one of the most hyped sectors of the decade, says Saz-Carranza, but hype can generate expectations that can’t be met. “If the AI investment bubble corrects sharply in 2026, the consequences could extend from capital markets to entire sectors of the economy,” warns Saz-Carranza. 

Recent research underscores this concern: global investment in data centers and AI infrastructure has surged, while valuations remain sky-high. A hard landing could send shocks across markets, tightening credit conditions for both start-ups and established firms. “Slower adoption, rising costs, supply chain constraints, and weak depreciation accounting could pose risks to global financial stability,” cautions the Trends research report.

As AI becomes embedded in decision-making, governance, bias, and control issues are emerging as serious business and political risks, not just abstract ethical topics.

For corporate leaders, the challenge is to remain innovative while being prepared for scenarios where AI’s rapid ascent stalls or regulatory constraints bite.

Geopolitical awareness is the smartest tool

Aside from the five key risks highlighted by Saz-Carranza, the world is struggling with other persistent crises. Countries including the Democratic Republic of Congo, Myanmar, Venezuela and Kashmir all hold the potential to destabilize their regions.

Other reports caution against several additional risks that could disrupt business stability. Political revolution in Trump’s America, a security vacuum in Europe as the US retreats, and water as a weapon between rival regions.

“Leaders can no longer treat geopolitics as background noise,” says Saz-Carranza. Whether it’s industrial rivalry with China, regulatory divergence with the US, electoral unpredictability, regional instability, or technological overheating, 2026 looks set to challenge corporate agility like never before. 

Reactivity alone won’t serve as the best tool. Businesses must build strategic resilience—integrating geopolitical insight into core decision-making, supply chain design and long-term investment planning.