Davos: Economic war is the ‘biggest global risk’
Trade wars and economic disputes between global powers are the biggest risk to the world over the next two years, business leaders, academics and government officials have said in a report ahead of the World Economic Forum’s Davos meeting.
Nearly a fifth of respondents in a survey (18 per cent) by the World Economic Forum said “geoeconomic confrontation” was the biggest threat to the world, beating other issues such as state-based armed conflict, climate change and disinformation.
The survey of 1,300 key figures, who mainly work in global businesses but also come from civil society organisations and different governments, said clashes between economies could put the world under threat.
The issue of “geo-economic confrontation” jumped eight places in the ranking of immediate threats to world order compared to last year’s survey. Economic downturn and inflation also rose through the risk ranking.
The publication of the World Economic Forum – whose Davos conference attracts some of the most influential figures from across the world – report follows a turbulent start to the year.
So far in 2026, President Trump has captured former Venezuelan leader Nicolas Maduro in part to gain control over the world’s largest oil reserves, Greenland’s sovereignty has been threatened over natural resources and economists have predicted that another energy shock could be triggered by a conflict in Iran amid the killing of thousands of protestors in the country.
Responses were collected between August and September last year, reflecting concerns about Xi Jinping, Vladimir Putin and Trump’s next move after a trade war erupted in April last year and the US built closer ties with Russia to negotiate the end of the war in Ukraine.
World Economic Forum managing director Saadia Zahidi offered stern words for the credibility of international laws that govern countries’ diplomatic relations.
“Rules and institutions that have long underpinned stability are increasingly deadlocked or ineffective in managing this turbulence,” Zahidi said.
Davos leaders concerned about climate change
The biggest threat over a ten-year horizon was extreme weather events, followed by biodiversity loss and “critical change to Earth systems”.
It suggests that climate-related issues are serious long-term concerns for world leaders, along with “adverse outcomes” of AI and the proliferation of fake news through “misinformation and disinformation”.
When asked which issue “best characterises” the terms of global cooperation on risks in 10 years, some 68 per cent said they expected middle and great powers to “contest, set and enforce” regional rules and norms.
The “reinvigoration of the US-led, rules-based international order” was a prediction for diplomacy terms for just 6 per cent of respondents.
President Trump, Keir Starmer and EU leaders are expected to attend Davos next week, with talks on Ukraine’s future expected to be held.
Starmer and Rachel Reeves will meanwhile hope they can secure further investments in the UK at the business-focused meeting in the Swiss Alps, with the Chancellor expected to attend a meeting with JP Morgan’s Jamie Dimon.