Global companies are no longer able to build their strategies based on cost and efficiency considerations alone, after geopolitical and trade tensions turned into a direct factor in determining the destination of investments, production sites, and sources of supply. Competition between major powers, increasing trade restrictions, and supply chain disruptions have prompted the business sector to reconsider the markets in which it operates, the suppliers it relies on, and the extent to which its operations are exposed to cross-border risks.
This transformation reflects a gradual transition from an economic model that sought to maximize efficiency by distributing production globally, to a model that gives greater weight to security, flexibility, and the ability to continue in the face of crises. Diversifying suppliers and markets is no longer just an option for business expansion; Rather, it has become a means to reduce dependence on specific sources and protect companies from the fluctuations of the international environment, even if this entails incurring additional costs.
In an indication of the expansion of this shift, the 2026 International Chamber of Commerce Survey, issued by the World Federation of Chambers of Commerce, revealed that 70 percent of chambers of commerce around the world place geopolitical tensions at the forefront of the challenges facing the business sector, an increase of 14 percentage points compared to 2025. Thus, political risks have surpassed tariffs and inflation, becoming the most prominent concern in the accounts of companies and markets.
Business risks prompt a re-prioritization
The results of the survey, a copy of which was obtained by Asharq Al-Awsat, show that the state of uncertainty is no longer limited to conflict areas. Rather, it is now being reflected in the business environment in a wide range of economies. Chambers of commerce in 61 percent of the countries surveyed reported that the commercial environment negatively affects their business during 2026.
Commercial uncertainty was the first source of concern. It was indicated by 70 percent of chambers of commerce, ahead of customs duties, which reached 63 percent, and import and export restrictions, which recorded 39 percent. These indicators highlight the extent of the challenges facing companies in light of the escalation of trade procedures and fears of retaliatory measures, and the effects they could have on the movement of goods and investments.
These repercussions are not limited to cross-border trade; Rather, it extends to the cost of production and price levels. In about 9 out of 10 countries, chambers of commerce reported rising prices, while in 8 out of 10 countries, chambers of commerce expected continued inflationary pressures, reflecting the transfer of some of the cost of trade disruptions to companies and markets.
In the face of these risks, companies tend to modify their trade maps instead of relying on specific suppliers and markets. The survey showed that diversifying exports, chosen by 73 percent of participants, and resorting to alternative suppliers, by 64 percent, are the preferred responses to dealing with trade disruptions. In contrast, production relocation continues to decline, indicating that companies prefer to strengthen and diversify their existing business networks, rather than relocating their production processes on a large scale.
Cautious optimism despite escalating risks
Despite these challenges, the survey results do not reflect an entirely pessimistic picture of business prospects; Chambers of Commerce rated the economic environment as good, very good, or excellent in more than half of the countries surveyed, while the percentage of countries that described it as bad or very bad did not exceed 10 percent.
The outlook for business activity has also improved compared to last year; Chambers of Commerce in 6 out of 10 countries expect activity to increase during the coming period, compared to 5 out of 10 countries in the 2025 survey. This indicates that companies are not necessarily heading towards contraction; Rather, it is trying to adapt to new risks and reorganize its business to allow it to continue growing in a more volatile environment.
Artificial intelligence...an economic opportunity and competitive arena
The reshaping of the business environment is not limited to trade and supply chains; Rather, it extends to technology, which in turn has become part of economic and geopolitical competition. Artificial intelligence, which companies are racing to adopt to enhance productivity, has also become linked to the ability of countries to possess the advanced chips, infrastructure, data centers, and computing capabilities necessary to develop it.
In this context, the survey showed an acceleration in the adoption of artificial intelligence technologies, with the percentage of chambers of commerce that reported widespread adoption of this technology rising to 32 percent, after doubling by about three times since 2024. More than 93 percent of the participating chambers of commerce also believe that the artificial intelligence boom will continue, while about 90 percent of them expect the technology to contribute to improving productivity.
But optimism about productivity gains is matched by some concern about the implications of technology on the labor market. While about 40 percent of chambers of commerce expect artificial intelligence to have a positive impact on jobs, half of the participants expect it to lead to a reduction in office job opportunities, compared to 32 percent who expect a decrease in jobs in manual professions. Chambers of commerce in emerging economies generally seem more optimistic about the impact of technology on employment than their counterparts in advanced economies.
These concerns overlap with the intensification of international competition for leadership in the sector. The survey reflects the growing perception of China as a leading force in the artificial intelligence race. Half of the participating chambers of commerce ranked China at the forefront of developed countries in this field, compared to 38 percent who chose the United States, a trend shared by even some North American participants.
The chief economist at the Bank of England, Hugh Bell, suggested that the bank will have to continue raising interest rates through 2027, in addition to the expected increase at its next meeting in December, to confront continued inflationary pressures, in light of the risks of rising energy costs being transmitted to wages and prices.
In an interview with the Financial Times published on Saturday, Bell said that the rate increase at the November meeting was an “important step” towards putting monetary policy on the appropriate path, but he added: “We still have more to do,” indicating that he expects indicators to emerge that justify additional increases in interest rates next year.
The Bank of England had raised the interest rate to 4 percent from 3.75 percent during its meeting in November, in the first increase since August 2023. Bell confirmed that the bank would take what is necessary to return inflation to its target of 2 percent.
These expectations come at a time when the bank expects British inflation to rise to about 5 percent in the middle of next year, more than double the target, due to the indirect effects of rising energy costs resulting from the Iranian war, especially its transmission to wages.
Bell considered that the end of the conflict between the United States, Israel and Iran, and the decline in energy prices that might accompany it, is a very weak possibility, which strengthens his vote preferences in favor of a new interest rate increase by a quarter of a percentage point in December.
Bell acknowledged that the bank was late in moving to confront inflation, saying: “In my opinion, we waited too long,” warning that the delay in raising borrowing costs reduced the bank’s ability to be satisfied with limited increases.
Markets are currently pricing in a cumulative monetary tightening of about 90 basis points by the end of 2027, which could push interest rates closer to 5 percent. Bell described these expectations as “not exaggerated.”
In a separate context, the report indicated that Bell does not intend to seek a third term as chief economist at the bank, when his current term ends in September 2027.
