After a year of policy unpredictability from Washington that had already unsettled global markets, the first few weeks of 2026 appear to have delivered a decisive blow to the foundations of the post-war rules-based global order.
In the US, the criminal investigation into Federal Reserve chair Jerome Powell is widely seen as an attempt to intimidate the central bank and erode its independence. Coupled with the deployment of immigration & customs enforcement units across major US cities, these actions suggest a pattern of political encroachment on institutions and growing executive overreach — unnervingly echoing the behaviour of some of the world’s most fragile economies.
The snatching of Venezuelan President Nicolás Maduro and threats to annex Greenland — a territory of Nato member Denmark — coupled with ongoing warnings directed at Iran, Cuba and others, signal a dramatic shift in US foreign policy. Senior presidential adviser Stephen Miller captured this shift in a recent CNN interview, arguing that global politics is ultimately governed by “strength, force and power”, rather than by international norms or diplomatic expectations.
Such talk takes the US from the language of the Marshall Plan and the leadership of the free world into the colder, more ruthless mindset of Bismarck’s “blood and iron”.
It is little surprise then that political risk firm GZERO has identified the US as the single biggest geopolitical threat to the world economy in 2026. With Washington the primary source of political volatility, institutional erosion and erratic geo-economic behaviour, the global system faces turbulence at a time when no alternative stabilising power exists.
Financial markets proved remarkably resilient last year, absorbing a vast array of shocks and heightened levels of policy uncertainty. However, they are far less well equipped to navigate an environment in which the operating framework itself begins to unravel
Financial markets proved remarkably resilient last year, absorbing a vast array of shocks and heightened levels of policy uncertainty. However, they are far less well equipped to navigate an environment in which the operating framework itself begins to unravel.
The health of the global economy depends on predictable behaviour: respect for sovereignty, stable alliances and the integrity of contractual commitments. When these assumptions are undermined, risk appetite fades. Investors demand higher returns to compensate for political unpredictability, particularly in emerging markets but now also, bizarrely, in the US. Long-term investment decisions are deferred. In effect, the perception of systemic instability results in a tightening in global financial conditions.
The recent developments are likely to accelerate the global drift towards fragmentation as countries reduce their exposure to the US, strengthen regional alliances and explore alternative financial and trading systems. The result is a global landscape edging closer to a multipolar system defined by competing blocs, steadily unwinding the integrated globalisation that has shaped the past few decades.
Yet this unravelling is ultimately self‑defeating, since the most serious challenges of the 21st century — from climate change to the risks posed by unregulated AI — are inherently transnational and cannot be tackled in isolation.
For South Africa, this shift brings both risks and opportunities. A slower pace of global growth, weaker trade volumes and politically reshaped supply chains will weigh on our small, open economy, exposed as it is to commodity cycles.
Yet the diversification away from historically US-centric systems creates space for middle-power diplomacy. South Africa — already a G20 member and Brics founder — is well positioned to establish itself as an advocate for multilateralism and a more inclusive, equitable global order. In the emerging environment, our mineral assets — particularly platinum group metals and critical minerals — become more strategically valuable.
The challenge is to navigate this increasingly fractured and shifting landscape, focusing on greater domestic resilience while ensuring that South Africa helps to shape, rather than just adapts to, the new global geo-economic order.
In an environment where there is much we cannot control, the least we can do is up our diplomatic game to define and protect our hard interests, rather than express our ideological emotions.
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