Tradewinds: Navigating Economic Uncertainty | Global Conference 2026

Panel Consensus on Globalization and Economic Resilience

• The global economy is at a fundamental inflection point characterized by a reassessment of the rules-based trading system and a shift toward national security-focused industrial policy.
• Despite widespread rhetoric regarding "de-globalization," panelists and data indicate that global trade has not reversed; trade in goods increased last year, and services trade increased exponentially.
• While trade continues, the system is experiencing significant inefficiency driven by policy unpredictability rather than a halt in activity.
• Uncertainty is quantified as a direct cost to the global economy, estimated at nearly $250 billion in lost activity last year, with projections rising to $380 billion annually if the trend continues.
• Businesses view uncertainty as a primary management priority, necessitating the addition of redundancies and latencies to supply chains, which contributes to inflationary pressures.
• No major company interviewed indicated an intent to operate solely as a domestic business; the strategic focus remains on global expansion, albeit with more regionalized and resilient supply chains.
• The US economy has demonstrated resilience despite geopolitical friction and tariff agendas, though business loathing for uncertainty remains high.
• The European Union views the current geopolitical volatility as a "wake-up call" to pursue greater strategic autonomy, though predictability remains elusive for businesses.
• Chilean officials note that while supply chain diversification increases immediate costs, it may eventually reduce risk premiums and improve net present value by mitigating supply shocks.
• The International Chamber of Commerce (ICC) reports that multilateral consensus-based models are failing to function, leading to a rise in "plurilateral" arrangements where subsets of countries move forward without full global agreement.

Geopolitical Disruptions and Immediate Economic Impacts

• Blockages in the Strait of Hormuz and conflicts between Iran, Israel, and the US have triggered a "perfect storm" threatening a significant global food crisis within six months, potentially reaching scarcity levels seen in 2008-2009.
• The food crisis is driven not just by oil prices, but specifically by supply disruptions to fertilizer, which are critical for farming in developing and emerging economies.
• The ICC and UN Secretary-General are actively working to establish a "deconfliction" mechanism similar to the Black Sea Grain Initiative to restore trade routes for fertilizer and food.
• European officials warn that the economic cost of current geopolitical uncertainty may exceed the costs of tariffs alone, creating a lose-lose scenario that widens the gap between the Global North and South.
• Chile has observed a historic spike in energy prices, exceeding the magnitude of the 1973 oil shock, though the country is partially insulated by diversified energy sources and long-term optimism driven by green hydrogen technology.
• The conflict has also halted humanitarian aid delivery to Lebanon and other conflict zones, accelerating the timeline of economic and humanitarian damage beyond the six-month food shortage window.
• European economies face dual pressure from rising energy costs and the inability to deliver aid to neighboring conflict regions, compounding the strain on public finances and social stability.

US-China Relations and Trade Realities

• The US-China relationship is evolving from a strategy of decoupling to one of "de-risking" and managing interdependence, driven by US recognition of China's control over critical rare earth minerals.
• The US administration, viewed as pragmatic by some, is expected to negotiate deals during upcoming summits while simultaneously pursuing investment diversification in critical mineral supply chains.
• Chinese industrial policy is shifting from simple export hub status to an aggressive export of production capacity and know-how, with Chinese firms raising capital in Hong Kong to globalize operations.
• Chinese EV manufacturers, facing intense domestic competition ("involution") and weak local demand, are rapidly expanding export capacity, with some firms already producing millions of units for export.
• Panelists argue that full decoupling is economically unfeasible for many nations, such as Australia and Indonesia, necessitating a "living with China" strategy that requires Beijing to rebalance its economy toward internal consumption.
• A major source of tension is China's continued adherence to an export-driven economic model that relies on state aid and non-market practices, which violates original WTO assumptions of market moderation.
• European nations advocate for a level playing field, suggesting that tariffs or carbon border adjustments may be necessary if trading partners do not meet comparable social, environmental, and fiscal standards.

Technological Transformations and Future Outlook

• AI and blockchain (tokenization) are expected to drastically reduce friction and costs in trade finance and payments, potentially reducing transaction costs to near zero if government adoption increases.
• The deployment of AI is currently hindered by data sovereignty issues and a lack of coherent global regulatory norms, creating potential barriers to global economic integration.
• There are concerns that the global race for AI dominance could lead to inward-looking policies and the fracturing of global labor markets if not managed through international cooperation.
• The US economy faces concerns regarding potential bubbles in the AI investment sector, alongside the need for clear regulatory structures to govern future work and deployment.
• Future trade growth depends on the ability of the global community to address the "inflationary cost" of supply chain fragmentation through productivity improvements and economic reforms rather than just fiscal stimulus.
• Long-term optimism for narrowing the North-South wealth gap rests on the potential for technological revolutions, specifically in green energy and AI, to allow developing nations to leapfrog traditional industrialization.