The New Rules Of The Road: Top Global Risks For Businesses In 2026

• Published date: 07 January 2026
• Law Firm: Steptoe LLP
• Author: Melissa B. Mahle, Anni Coonan, Thomas Goldstein and Zayna Dembinski

Overview

In 2026, with global trade and geopolitical norms no longer the organizing force they once were, complexity will be the watchword for businesses operating in an unprecedentedly fragmented global business environment.

Western businesses should expect significant change in the coming year: the unipolar moment now decisively dead and gone. The coming year will present continued great power tensions as the US, China and Europe seek rebalancing of power and influence, opening access in some regions while creating barriers in others. The US will work even harder to leverage its political, economic and military power to re-make the global system to its advantage. Other countries will move from reaction to taking more proactive measures to protect their national interests and economic competitiveness. As the US retreats from longstanding trade relations and adopts more protectionist policies, global trade will fragment into new blocs to mitigate the adverse impacts of US-led tariffs, sanctions and other trade barriers, a shift that could displace the US from its traditional position of global trade leadership.

Disruptive technology will bring new opportunities with AI applications in defense, manufacturing, healthcare and education, as well as intensify geopolitical competition for leadership in the technology of the future. AI is expected to reshape the labor market by automating certain roles to the point of redundancy, while simultaneously creating demand for new skill sets that many workers currently lack, leading to both job displacement and talent shortages.

While the adverse impacts of climate change will be felt worldwide, developing countries are likely to be less resilient, facing escalating humanitarian costs and supply chain disruptions, even as global consensus on climate action continues to erode.

Below are Steptoe's Risk Outlook top risks for 2026, which forecast another year of a high rate of change and uncertainty impacting global politics, trade, human security and resiliency.

Geopolitical Risks

• US-China relations will remain adversarial but stable while multi-aligned countries grow in power. Washington and Beijing's intense competition is embedded in both countries' political, economic, and security systems making sustained rivalry the baseline. Yet, both sides are set to pursue greater stability into 2026 despite these deep-seated differences, with tariff truces, dialogues, and limited cooperation continuing, reflecting domestic pressures and recognition of economic entanglement rather than a structural shift in the relationship. While flashpoints such as Taiwan will be carefully managed to avoid escalation, the possibility of sudden disruptions remains. Like-minded middle powers, like India or Brazil, are set to strengthen regional and issue-based partnerships to preserve strategic autonomy, resulting in a looser, more fragmented international order that buffers against great power competition On the upside, this could push blocs'such as ASEAN'to resolve longstanding internal divisions and address shared challenges collectively, including climate change and security threats.*
• The Ukraine War will stress-test the transatlantic alliance. Despite peace negotiations beginning in earnest in early 2025, Russia's maximalist objectives remain unchanged. Observers around the world'including China'are learning the new mode of conventional warfare, from Russia's Shahed-style drones piercing NATO's integrated air defenses in Poland, Ukraine's Operation Spiderweb disabling much of Russia's strategic bomber fleet, and Ukrainian sea drones nullifying Russia's naval advantage NATO allies fear that Russia's wartime economy has achieved a scale of production capable of sustaining operations against the alliance within a few years. If peace is achieved in 2026, it will be struck not due to a substantive political settlement but rather a security arrangement that restores deterrence. Transatlantic...