Q1: From the perspective of 2025, in your view, which factors are likely to exert the strongest influence on the global economic and financial landscape in 2026?
Based on the current trends I see in 2025, three main factors will shape 2026:
- The Institutionalization of “Geoeconomic Fragmentation”: We have moved beyond mere trade disputes into a solidified era of economic blocs. The implementation of the US reciprocal tariff mechanism in April 2025 fundamentally altered the WTO-based order. In 2026, the primary influencer is no longer just “market efficiency” but “security alignment.” For Vietnam, this means origin compliance and supply chain transparency are as critical as labor costs.
- The “Application Phase” of AI and Energy Constraints: While 2024-2025 was about building AI infrastructure (chips and data centers), 2026 is the year of integration. The economic winners will be defined by productivity gains in non-tech sectors (legal, manufacturing, logistics). However, this is colliding with physical constraints—specifically energy availability. The race for clean power to fuel these data centers is rewriting national energy master plans (including Vietnam’s PDP8 implementation).
- Digital and Green Compliance: The global economy is no longer just about cheap labor. It is about “clean” data and “clean” energy. Countries that enforce strict data laws and offer renewable energy sources will dominate the supply chain.
Q2: How, in your view, will the increase in reciprocal tariffs by major economies, specifically the United States, specifically affect global trade and the flow of goods in 2026?
The era of simple free trade is changing. The increase in US reciprocal tariffs means that the “origin” of goods matters more than ever.
In 2026, global trade will not just flow to the cheapest location; it will flow to the “safest” location.
- The End of Transshipment: The US is very concerned about countries being used as a “third transit” point to bypass tariffs. If a country cannot prove exactly where its goods come from (traceability), it will be punished.
- The Need for “True” Manufacturing: Investors will move away from simple assembly. To avoid high tariffs, companies must move deep processing and real manufacturing into countries like Vietnam. They can no longer just stick a “Made in Vietnam” label on a product from another country.
- Diversification is Key: Because the US market is becoming harder to access, smart economies will focus on other agreements. For Vietnam, this means using the EVFTA (Europe) and RCEP (Asia) to balance the risk.
Q3: If global interest rates begin to ease, which markets do you believe international capital flows are most likely to return to in 2026, and why?
When interest rates go down, money looks for higher growth. In 2026, capital will not return to all markets; it will flow to markets that have fixed their “plumbing”—meaning their legal and financial structures.
Money will flow specifically to:
- Markets with New “Non-Prefunding” Models: Institutional investors (the “smart money”) hate locking up 100% of their cash before making a trade. Markets like Vietnam that have removed this “pre-funding” requirement will see the biggest return of capital.
- The Banking Sector: As economies grow, banks need more money to lend. We will see foreign capital rushing to buy equity in banks, especially where foreign ownership limits are raised.
- Infrastructure and Energy: Capital will chase projects with government guarantees. With interest rates easing, investors will finally have the cheap capital needed to fund massive projects like LNG power plants and logistics centers, provided the legal framework (like PPP laws) is safe.
Q4: If you had to choose three key words to define the global economy and financial markets in 2026, what would they be, and what is your reasoning behind each choice?
- Traceability: In a world of trade wars, “trust” is replaced by “proof.” You must be able to trace every step of your supply chain. If you cannot prove where your product was made, you cannot sell it to the West.
- Readiness: Opportunities in 2026 (like the Emerging Market upgrade) are huge, but they will happen fast. The “liquidity wave” will only benefit those who are ready before it hits. Investors and companies who wait until late 2026 to restructure will be too late.
- Fragmentation: The global single market is no longer a thing due to the reciprocal tariffs by major economies, especially the US. We are now operating in a fragmented world of distinct regulatory blocs (US-aligned vs. Global South/BRICS+). Legal advice and business strategy can no longer be “global”; they must be tailored to the specific bloc you are operating within.
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Please do not hesitate to contact Dr. Oliver Massmann under [email protected] if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.