The World Economic Forum has warned that rising geo-economic fragmentation and trade decoupling could cost the global economy up to $6.9 trillion, disrupting investment, trade and long-term economic growth.

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• The World Economic Forum has warned that a complete East-West economic decoupling could reduce global GDP by as much as $6.9 trillion in the coming years.
• According to the report, global economic fragmentation has already lowered worldwide GDP growth by an estimated $213 billion to $307 billion while increasing inflation by 0.2-0.3 percentage points.
• Emerging markets and developing economies are expected to face the greatest impact due to declining access to global capital, investment flows and international financing.
• The report highlights that policy uncertainty and abrupt regulatory changes during 2025 and 2026 have negatively affected business confidence, hiring decisions and long-term investments.
• Rising trade barriers, financial restrictions and geopolitical tensions have accelerated the shift from globalization toward geo-economic fragmentation across major economies.
• The United States has expanded tariffs and trade restrictions targeting China, while China has responded by leveraging its dominance in critical mineral supply chains and redirecting exports.
• China’s strategic export adjustments helped the country achieve a record trade surplus in 2025 despite escalating global trade tensions and restrictive economic measures.
• The WEF emphasized that increasing fragmentation could weaken global supply chains, slow economic recovery, raise inflationary pressures and create long-term challenges for international trade.