Trade and Financial Fragmentation Spreads Beyond Rivals as Costs Mount in World Economy News 15/06/2026 Geoeconomic fragmentation is imposing an annual cost of $213–$307 billion on the global economy, according to a new World Economic Forum report released today. Driven by geopolitical tensions, economic security concerns and shifting trade relationships across major economies, fragmentation accelerated through 2025 and 2026 and is increasingly affecting trade, finance and investment systems. Deepening Divides: The Cost of a More Fragmented Financial System – published in collaboration with Oliver Wyman, a Marsh business, and the second in the Forum’s fragmentation series – finds that these pressures are playing out through escalating tariffs, investment restrictions and retaliatory measures. The report finds that the growing use of economic statecraft in 2025 and 2026 marked a turning point for global trade and finance. While the first report focused primarily on fragmentation risks between geopolitical rivals, the latest findings suggest a broader structural shift is underway. Tariffs and investment restrictions are increasingly affecting traditionally aligned economies, including the US, the EU, Canada, Japan and South Korea, raising costs for businesses and increasing uncertainty for cross-border trade and investment. “The global financial system has faced increasing pressures from geopolitical and economic fragmentation,” says Matthew Blake, Managing Director and Head of the Centre for Financial and Monetary Systems World Economic Forum. “Despite these pressures, the financial system has remained resilient. Markets have continued to provide real-time feedback on evolving policies while policy-makers have generally avoided actions that could erode confidence in the international financial system. As fragmentation persists, preserving the trust and stability that underpin global finance will be critical to supporting long-term growth and prosperity.” The economic