An unsettled world in 2026

THE world faces heightened uncertainty in 2026 as geopolitical and geo-economic tensions intensify and conflicts persist. With the world appearing more unsettled than at any time since the end of the Cold War, President Donald Trump’s ‘America First’ unilateralism will inject more instability into global affairs. The rules-based order, in precipitous decline, will fragment further. Multilateralism will come under greater stress. Western dominance will decline even though the US-led West will continue to exert significant influence in the international system. China’s global power and role will increase. Volatility will be a pronounced feature of the fractured international landscape. A more multipolar world will see middle powers play a growing role in shaping geopolitics and acting assertively. Six major trends will shape world affairs in the coming year, although this of course is not an exhaustive list. The first is a shifting geopolitical landscape with changing alignments, eroding rules and a high degree of unpredictability. Geopolitical shifts will principally be determined by how the situation evolves in the Middle East and Ukraine, the course of US-China relations and adjustments countries make in response to the trade war unleashed by Trump. With global norms being upended by Trump’s disruptive policies and other powers showing similar disregard, the drift to what some call a ‘no-rules world’ will become more evident. In its assessment of top risks for 2026, Control Risks, a London-based consultancy firm, forecasts a world in which established rules will fade and even break down. This will make international relationships more transactional and situational. Interests, it argues, will become the “new values”. The second trend continuing into the coming year is greater use of hard power that characterised international politics in 2025. This is apparent in military or economic coercion rather than dialogue and diplomacy becoming the preferred policy choice of powerful countries and regional powers to bend other states to their will. The threat or the use of force in defiance of international law has become more frequent in this new era of conflict. Israel’s war on Gaza, attacks on Iran, Syria, Lebanon and Yemen, the Russian invasion of Ukraine, US bombardment of Iran and India’s military action against Pakistan all testify to the increasing use of force. It means a fraying global order will fragment further. Trends point to heightened geopolitical tensions, persisting conflicts and fragmenting world order. In its annual publication ‘The World Ahead’, The Economist poses the question whether the world is headed towards a new Cold War between blocs led by the US and China or will Trump’s deal-driven approach divide the world into American, Chinese and Russian “spheres of influence” where each of them will decide rules of the game in their domain. It notes foreign policy experts are conflicted on this and there is little certainty which of the two will materialise. Three, the course of relations between the US and China will be the most significant strategic dynamic in the year ahead as it has been in recent years. This remains the world’s most consequential relationship with far-reaching global impact. Trump’s tariff offensive against China set relations onto a turbulent course. Nevertheless, Trump has repeatedly said he wants a deal with Beijing and he did reach a trade agreement with President Xi Jinping in their October 2025 meeting. But this only marks a temporary truce in the trade war as the one-year sunset clause indicates difficult negotiations later next year. Other issues of discord that drive tensions also remain unresolved. China’s effective pushback against US tariffs by using its leverage on critical rare-earth minerals, on which it has a near-monopoly, showed two things — that it can also inflict pain on America and is not hesitant to flex its muscles. China is set to emerge as the largest economy in 2026 and is already the largest trading partner of around 70 countries. Its global influence is therefore expected to grow especially as it projects itself as a stable partner in contrast to Trump’s whimsical conduct. While both countries have a mutual interest to de-escalate, 2026 will determine how durable the temporary calm in their relations will be. Four, efforts for peace in the Middle East will continue to dominate the international agenda. Trump’s 20-point Gaza peace plan, endorsed by a UN Security Council resolution, hangs in the balance as obstacles to its implementation have yet to be surmounted. Hamas rejected the resolution on several counts. Israeli violations of the ceasefire continue. So does its occupation of over half of Gaza and violence against Palestinians in the West Bank. In these circumstances, Hamas will not disarm. Muslim countries that earlier indicated their intention to join the international stabilisation force are now getting cold feet because of...

An unsettled world in 2026

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