Tariffs, artificial intelligence top World Economic Forum 2026 risk report

Global power rivalries and strategic confrontations top the list of most severe near-term risks through 2026, according to the World Economic Forum’s Global Risks Report released on Wednesday.

Half of the business executives and other leaders surveyed said they expect turbulent times over the next two years, and only 1% said they expect calm, according to the report. The resulting image is one of the world “sitting on the edge of a precipice.”

The report, which surveyed 1,300 leaders in government, business and other organizations, captures a changing landscape as “geoeconomic confrontation” jumps to number one on the list of business concerns over the next two years – fueled by increasing competition and the weaponization of economic tools such as tariffs, regulations, supply chains and capital constraints. The report warns that this could lead to a significant contraction in global trade.

“It has a lot to do with state-based armed conflict and the concerns surrounding it,” Saadia Zahidi, executive director of the World Economic Forum, told CNBC’s “Squawk Box Europe” on Wednesday. “So, overall, nearly a third of respondents are very concerned in 2026 about what that means for the global economy and the state of the world basically.”

Concerns about economic risks over the next two years saw the steepest rises among all risk categories surveyed by the World Economic Forum, according to the report.

“Fears [are] “Growth is growing due to economic contraction, high inflation and potential asset bubbles as countries face high debt burdens and volatile markets,” Zahidi wrote in the report.

The largest insurance brokerage company in the world, Marsh — which was rebranded on Wednesday from Marsh McLennan — is collaborating with the World Economic Forum on global risks.

“Today is not a moment of great global crisis, it is a moment of multiple crises,” Marsh CEO John Doyle told CNBC in an exclusive interview.

Doyle listed trade wars, culture wars, the rapid technological revolution and the impact of extreme weather among the current obstacles facing business.

“There is a lot that companies have to confront and manage,” he said.

Misinformation and disinformation rank second on the World Economic Forum’s list of short-term risks, followed by societal polarization – or widening gaps between sharply opposing groups of people. Inequality was identified as the top interconnected risk over the next 10 years.

The report concludes that all of this creates obstacles to the kind of cooperation necessary to address economic shocks.

The issue that rose higher and faster than any other in the survey was the potential for negative outcomes from AI, moving from 30th place among short-term risks as of last year to 5th place among long-term risks in the latest rankings.

For example, labor displacement can lead to massive increases in income inequality, increasing societal divisions, contraction in consumer spending, and vicious cycles of economic contraction and social discontent on the back of massive productivity gains, according to the World Economic Forum report.

The report notes that machine learning and quantum computing are converging, and their development is accelerating, warning of a highly charged landscape that “could lead to situations where humans lose control.”

While it is “pretty clear” that environmental risks have been “deprioritized” in the short term, according to Zahidi, extreme weather remains the top concern among leaders surveyed over the next decade.

Global insurance losses from natural disasters are expected to reach $107 billion in 2025, exceeding $100 billion for the sixth year in a row, a sharp increase even since the early 2000s.

Marsh CEO Doyle said the California wildfires in early 2025 demonstrate the need for regulation that would allow insurance prices to accurately reflect underlying risks in order to attract more capital into the insurance market.

“There are risk takers,” Doyle said. “And there are investors and insurance companies willing to finance these risks.” “It also makes sure that building codes are appropriate, that we learn from past events and that technologies are deployed so that risks can be managed effectively.”

“Extreme heat, drought, wildfires and other extreme weather events are likely to become more intense and frequent,” the report warns.

However, environmental risks such as “drastic changes to Earth systems”, “biodiversity loss and ecosystem collapse” and pollution have fallen significantly on the risk list – reflecting a change in what leaders are most concerned about.

Zahidi told CNBC that while leaders are “very distracted” by short-term concerns about “endless wars” and other issues such as inflation and disinformation, ongoing concerns about sustainability persist. “This huge, looming existential climate threat still exists,” she said. “But our collective ability and our collective minds… to act on it, that’s what’s been reduced.”

The report concludes that “coalitions of the willing” are crucial, and that cooperation between governments, academic institutions, business people and ordinary citizens is essential to strengthen resilience and find practical solutions to the world’s biggest challenges.

But Zahedi said the “retreat from multilateralism” and “a new era of competition” raise a lot of concern, because risks such as climate change and future pandemics require cooperation. “Will we be able to work together when we need to?” she told CNBC.