2026 is a pivotal year.
This is not because we should expect an upcoming confrontation between the two greatest powers, the United States and China. Tensions between the United States and Russia are also unlikely to spiral out of control this year. Instead, 2026 is shaping up to be a time of great geopolitical uncertainty, as the United States is in the process of upending its own world order.
1. American political revolution
What began as a tactical break with norms has become a system-level transformation: President Donald Trump’s attempt to systematically dismantle checks on his power, to seize the machinery of government and use it as a weapon against his domestic enemies. While many of the safeguards that existed during Trump’s first term have crumbled, we can no longer say with certainty what kind of political system the United States will be once this revolution is over. Ultimately, the revolution is more likely to fail than to succeed, but there will be no return to the status quo. The United States will be the main source of global risk this year.
2. Overpowered
The defining technologies of the 21st century run on electrons: electric vehicles, drones, robots, batteries, AI. All require the “electric battery”. China mastered it, becoming the first “electrostate”. The United States cedes it, thus consolidating the country’s status as the largest oil state in the world. By 2026, this divergence will become impossible to ignore. While Washington is asking countries to buy 20th century energy, Beijing is offering 21st century infrastructure at unbeatable prices. Emerging markets will increasingly favor Chinese supply. The cumulative effect is a geopolitical turning point: a growing share of the world’s energy, mobility, and industrial systems will be built on Chinese foundations, bringing Beijing commercial advantages and influence that soft power could never deliver on its own. The AI race raises the stakes: The United States can build the best models, but China could win the market if it can power and deploy AI at scale.
3. The Donroe Doctrine
President Trump is reviving and reinterpreting the logic of the Monroe Doctrine in an effort to assert U.S. primacy in the Western Hemisphere. The big news this year is Venezuela, where Washington’s intensifying regime change campaign culminated in a major victory for Trump with the ouster and trial of Nicolas Maduro in the United States. But eliminating Maduro was the easy part; the transition to a stable, pro-US, even democratic government will be more difficult. Across the region, heavy-handed U.S. tactics risk provoking backlash and unintended consequences.
Learn more: Trump’s goals in Venezuela do not hold water
4. Europe under siege
France, Germany and the United Kingdom each enter the year with weak and unpopular governments under siege by the populist right, the populist left and the Trump administration. These three countries risk paralysis at best and destabilization at worst – and at least one leader could fall. Europe’s ability to address its economic malaise, fill the security void left by the US withdrawal, and maintain its support for Ukraine beyond 2026 will suffer. If Washington openly interferes in European elections or takes the dramatic step of annexing Greenland, the already strained post-war alliance framework could shatter.
5. The second Russian front
Europe’s most dangerous front this year will move from the trenches of Donetsk to the hybrid war between Russia and NATO, as Vladimir Putin seeks to erode European support for Ukraine before economic tensions damage his ability to continue this hot war. After years of punishment, NATO will for the first time push Russian operations into the gray zone. The alliance will shoot down drones, hold exercises near the Russian border and carry out tougher offensive cyber actions. This combination will lead to more frequent and more dangerous clashes in the heart of Europe. As all parties become more accepting of risk, the margin for error will shrink.
6. State capitalism with American characteristics
The most economically interventionist administration since the New Deal will become more entrenched in 2026. Trump’s state capitalism is personal and transactional: businesses that align with him receive preferential treatment; those who are not likely to find themselves at a disadvantage. The toolkit is extensive and includes tariffs, equity investments, revenue sharing agreements, regulatory leverage and investment agreements for market access. Transactional logic also extends to foreign governments. As the midterms approach and economic discontent grows, Trump will double down on interventionism rather than back down. Tariffs will face constraints this year, so the administration will rely on other tools, picking winners and losers on a scale unprecedented in modern U.S. history. The precedent will remain for future administrations.
7. China’s deflationary trap
China’s deflationary spiral will deepen and Beijing will do nothing to stop it. As the 21st Party Congress approaches in 2027, Xi Jinping will prioritize political control and technological supremacy over boosting consumption, which could break the cycle and avoid a Japanese-style “lost decade.” The pain will fall hardest on young people, who are increasingly abandoning the “Chinese dream”. Beijing will continue to try to export its way out, flooding global markets – an approach that most of its trading partners may adopt this year but will not tolerate forever.
8. AI eats its users
AI is a revolutionary technology, but it has yet to meet investors’ expectations. Under increasing pressure to justify exorbitant valuations and without any constraints, a number of large AI companies will adopt extractive business models (such as experimenting with ads embedded in conversations where, unlike traditional search, there is no way to distinguish neutral information from paid influence) that threaten social and political stability – like social media, but worse. Social media attracted attention; AI programs behavior, shapes thoughts and mediates reality. The near-term threat comes not from superhuman machines but from the decline of thinking, feeling, and social humans.
Learn more: AI architects are TIME’s 2025 Person of the Year
9. USMCA zombie
North American trade will be blocked this year. The USMCA will not be extended, updated or scrapped: it will operate like a zombie, leaving businesses and governments in limbo. Trump does not want a new trilateral agreement; the zombie deal allows it to continue to pressure Mexico and Canada for bilateral concessions. Tariff exemptions for compliant products will remain in effect, but for the sectors the United States wants to relocate – autos, steel, aluminum – the days of free and predictable North American trade are over.
10. The water gun
Water is already one of the most contested shared resources on the planet, but it is increasingly becoming a loaded weapon. Half of humanity already lives under water stress, and there is no architecture to manage it. In 2026, the governance void will widen: the Indus Waters Treaty suspended, the Ethiopian Nile dam operational without a binding agreement, China building the largest dam in the world without a downstream treaty. In Africa, extremists exploit ungoverned water scarcity to recruit and control populations. In South Asia, nuclear-armed rivals are turning rivers into leverage. No crisis can break out this year. But the weapons are loaded, the guardrails are removed, and with the next impact, the water will only make the situation worse.
False leads: overestimated risks
“Customs duty man” on the loose
Trump’s unilateralist instincts are intact, but his commercial influence will now be more limited. China’s rare earth influence pushed it toward a deal rather than a fight it couldn’t win. The economic order is increasingly multipolar and other countries have options. As the midterm elections approach, Trump will have less room to impose tariffs that drive up prices.
Learn more: Why Trump will turn a blind eye to China first
De-globalization
Despite stagnant trade growth and high tariffs, globalization continues. The tariff peaks are behind us and countries other than the United States want to preserve the system while protecting themselves. New trade deals continue to be struck even as tariffs dominate headlines and supply chains remain fragile. Risk reduction is not deglobalization.
Spheres of influence
The Western Hemisphere occupies an important place in American strategy, the agreements with Xi, the acceptance of Russian achievements – it seems like a 19th century division. But the United States remains a global power with global ambitions, just pursued in a more transactional way. The law of the jungle is back. This is not the case with spheres of influence: the world is both too interconnected to be divided and too fragmented to hold together.
Sell America
After “Liberation Day,” pundits declared that American exceptionalism was dead. However, the dollar remains the safe haven and the United States remains the most investment-friendly major economy. The reason: TINA (there is no alternative). The United States is too big, too innovative and too difficult to replace.
