Europe's Strategic Response to a Fragmented Global Economy Driven by US-China Rivalry

The global economy in 2026 is characterized by fragmentation and heightened geopolitical tensions, prompting new investment strategies and a call for European resilience. With the US dollar's decline and lasting impacts from previous trade wars, the world is transitioning toward a multipolar order where countries seek monetary, technological, and military independence from the United States.

According to economic expert Anthony Lapeyre from Amplegest, key events since 2022—including the Russia-Ukraine conflict, China's strategic plans, and AI innovation waves like ChatGPT—have fundamentally reshaped the investment landscape. This environment is marked by chronic public deficits and structurally higher inflation, shifting growth drivers from consumption to investment. Sectors such as technology and raw materials, especially metals, are expected to prosper amid this new economic paradigm.

Investors are advised to adopt a diversified approach, emphasizing thematic opportunities in AI, energy transition, and reindustrialization, while expanding geographic exposure to domestic European markets, Japan's industrial revival, and emerging Asian economies. However, caution remains necessary given elevated valuations in AI-related assets.

On the geopolitical front, French President Emmanuel Macron has called for robust European measures to counter US pressure, stressing legal frameworks over force. Echoing this, Nobel laureate Philippe Aghion criticized Europe's passive stance toward aggressive US policies under Donald Trump, particularly concerning Greenland, labeling such advances as "red lines." Aghion urged stronger cooperation between European powers, including France and the UK, to reinforce innovation and technological sovereignty, counteracting Europe's lag behind the US and China.

Together, these insights underscore the urgency for Europe to awaken strategically and economically to safeguard its interests amid intensifying global rivalry. The focus remains on boosting European innovation capacity, asserting political unity, and capitalizing on evolving structural trends shaping the fragmented yet opportunity-rich global economy.