Conference Presentation, Panel
Tradewinds: Navigating Economic Uncertainty | Global Conference 2026
Milken InstituteGerard Baker, Whitney Baird, Xavier Bettel, John Denton, Francisco Pérez Mackenna, Michael Roberts, Jerry Baker
- Global economic integration faces dramatic disruption from geopolitical events, political shifts, and technological changes, though the narrative of a total end to globalization may be exaggerated by media simplification.
- The U.S. is at a fundamental inflection point involving a reassessment of the rules-based trading system and an unprecedented level of industrial policy driven by the convergence of national and economic security.
- Business faces significant uncertainty from tariff agendas and geopolitical conflicts, with the cost of uncertainty projected to rise from $250 billion to approximately $380 billion annually, impacting activity and employment.
- Multilateral institutions like the WTO may be upended or bypassed by governments seeking "pluralateral" agreements or regional blocks, though the ICC plans to upgrade trade infrastructure and enable economic activity without waiting for government consensus.
- Energy and commodity markets face volatility and unpredictability due to conflicts, OPEC decisions, and a significant food crisis expected to emerge in about six months, potentially exacerbated by blocked humanitarian aid.
- Inflationary pressures are rising due to tariffs, freight costs, and redundancy costs, forcing companies to pass costs to buyers while shifting toward more regional supply chains and diversified sourcing despite higher initial expenses.
- China is actively exporting production capacity and know-how globally, with EV production capacity expected to double or triple over the next 15 to 20 years, while the U.S. continues to seek reduced dependence on Chinese inputs.
- Decoupling from China in the ASEAN region is deemed unlikely due to the difficulty of unpicking established factories, creating a complex dynamic where regional trade will continue but with different structural configurations.
- Technological advancements, particularly in AI, green energy, and blockchain tokenization, offer long-term opportunities to reduce friction costs, close wealth gaps, and potentially handle customs and trade financing entirely within 10 years.
- Major challenges for AI deployment include data sovereignty concerns in the Global South and a lack of coherent regulatory frameworks, necessitating new governance models involving governments, the private sector, and technologists.
- The European economy is experiencing huge impacts from current uncertainties, with inflation described as a fiscal problem where the lack of competitiveness is a greater concern than tariffs, driving calls for serious economic reform.
- Future stability relies on finding predictability amidst conflicts, with hopes for deconfliction in trade routes and potential high-level diplomatic meetings, though specific timelines for resolving conflicts with Russia or finalizing trade deals remain unclear.