Tariffs and AI's downside pose top global risks for business, World Economic Forum says

• Geoeconomic confrontation leads short-term risks as countries weaponize economic tools like tariffs, regulations, and supply chains, potentially causing substantial global trade contraction
• AI-related risks have risen faster than any other concern, with warnings that labor displacement could trigger massive income inequality, reduced consumer spending, and potential loss of human control over machine learning systems
• Extreme weather remains the top 10-year concern, with global insured catastrophe losses estimated at $107 billion in 2025, continuing a steep upward trend from the early 2000s

Summary: WEF 2026 Global Risks Report Highlights Tariffs and AI Threats

The World Economic Forum's 2026 Global Risks Report, released Wednesday, identifies geoeconomic confrontation as the top near-term business risk, driven by tariffs, trade restrictions, and supply chain weaponization. Half of surveyed business leaders expect turbulent conditions over the next two years, with only 1% anticipating calm.

Key Risks Identified:

Short-term (2 years):

1. Geoeconomic confrontation and trade wars
2. Misinformation and disinformation
3. Societal polarization
4. Economic downturn concerns with rising inflation and potential asset bubbles
5. Adverse AI outcomes (surged from 30th to 5th place year-over-year)

Long-term (10 years):

• Extreme weather events remain the top concern
• Inequality identified as most interconnected risk
• Environmental risks (biodiversity loss, pollution) have moved lower on priority lists

Critical Data Points:

• Global insured losses from natural catastrophes estimated at $107 billion in 2025
• AI-related risks experienced the fastest acceleration in the survey's history
• Zero percent of leaders expect stable conditions ahead

Market Implications:

Marsh CEO John Doyle described the current environment as "poly-crises," combining trade wars, technological disruption, and extreme weather. The report warns that geoeconomic tensions could trigger substantial global trade contraction. AI advancement, particularly with quantum computing convergence, may lead to scenarios where "humans lose control," potentially causing labor displacement, income inequality, and consumer spending contraction.

The WEF partnered with Marsh (formerly Marsh McLennan, rebranded Wednesday) on the report, emphasizing that multi-stakeholder "coalitions of the willing" are essential for building resilience against these interconnected global challenges.