George Friedman - one of America's most influential geopolitical analysts, founder of Stratfor and Geopolitical Futures - has presented his annual forecast for 2026. His main thesis: the Cold War ended not in Berlin, but in Ukraine - when the Russian army failed to take Kyiv and became bogged down on a sliver of territory. Russia has dropped out of the league of great powers, and the new world order will be built around US-China relations. Yet Friedman admits: Trump's actions on Greenland baffle him - for the first time in his career, he cannot explain the logic of an American president.
Christian Smith: Hello, and welcome to the Geopolitical Futures podcast. I'm Christian Smith.
What does 2026 hold for global geopolitics? A question that's harder to answer than usual right now. But it's precisely this question that the Geopolitical Futures team has attempted to answer in their just-released annual forecast titled "Re-anchoring the World." At its core lies the conviction that global geopolitics in 2026 will be defined by US-China relations. Relations that will ultimately lead to a much-needed agreement between the two countries and define international relations for a generation to come.
The full forecast with detailed analysis of every region of the world is available to subscribers at geopoliticalfutures.com. But today we want to give you a general overview of the global forecast on the US and China and what it means for two other major powers - India and Russia.
With me, as always, is the founder and chairman of Geopolitical Futures, the author of this forecast - George Friedman.
George Friedman: Hello.
Greenland: Beyond Comprehension
Christian Smith: But first, George, let's not avoid the main geopolitical question of the moment - Greenland. We're recording this on Tuesday, before President Trump's speech at the World Economic Forum in Davos on Wednesday, where there are rumors there might be some developments - bear that in mind. But, George, you've been writing about geopolitics for a long time. On Monday you published an article - I encourage our listeners to read it at geopoliticalfutures.com - where you admitted that what's happening around Greenland, in the US, in Washington and in Europe, has puzzled you. Why?
George Friedman: It has puzzled me greatly. Greenland's strategic importance is clear - both from a military standpoint and in terms of mineral resources. America's interest in ensuring its security is fully explainable. But America's desire to own Greenland right now - that's already on the edge of comprehension, because we could do everything necessary before.
The decision to impose tariffs against any European country that opposes American acquisition of Greenland - that's beyond comprehension. First, these tariffs hurt the US itself, not just their targets. Second, it threatens a fundamental reality - US-European relations. However they develop, this is bedrock.
So I wrote an apology to my readers. I confess: I don't understand why he did this. My work is built on understanding what nations must do, what they cannot do, what their capabilities are, and on that basis I build forecasts. This particular step by Trump goes beyond what I can understand. So I was obliged to tell readers that I don't understand. And I truly don't understand.
And if the letter that's now circulating online - the letter to the president of Norway, saying this is all because Trump didn't get the Nobel Prize - if that's true, then I'm completely at a loss. I don't know who needs to be called in here, and I won't say. But I cannot explain this.
So went my last 24-48 hours - social media is going crazy, every one of my readers wrote to me about this. And this is now a fundamental question. You know, normally... every president is an egomaniac. The very idea that you can become president of the United States requires a colossal ego. But all other presidents knew how to hide it. Take Clinton, for example - sometimes it showed through. But how openly Trump's ego manifests - that's extraordinary and not entirely explainable. That's what I'm grappling with.
Christian Smith: You've written about Greenland's strategic significance over the past couple of weeks. We discussed this in the podcast a couple of weeks ago, before the conversation about Iran. I think thanks to the publicity of this discussion, most people on both sides of the Atlantic who follow such things understand the strategic foundations of what's happening. In your view, what's the danger of pressuring allies through tariffs? We see threats of 200 percent tariffs on French wines - that's a disaster if you love wine, but hardly the end of the world. What's the danger in the medium and long term?
George Friedman: The economic interconnectedness of the US and Europe is deep, as is the security interconnectedness. To sever one is to somewhat sever the other. But remember, there's a case being heard in the Supreme Court. Claims are being made that Trump doesn't have the legal right to impose tariffs without Congressional approval, because it's a tax, and taxes are Congress's prerogative. So it's unclear whether he can even do this. It's even unclear to me whether he wanted to do this or just wanted to get a bargaining chip. But this chip, in my view, goes beyond acceptable bargaining.
If this is just a negotiating chip - fine, I can step back and say: okay, let's bargain. But given the intensity with which he's defended this position and the intensity with which Europeans are reacting, this could lead to a serious rupture. Europeans need relations with the US, the US needs relations with Europe in one form or another. This isn't the end. But it creates serious tension. And simultaneously within the US itself, this potentially creates a legal crisis and, I suspect, politically harms him considerably.
Christian Smith: George, since we're on this - you mentioned the correspondence with the president of Norway and the Nobel Peace Prize. Is this just... is this all just trolling? Trump loves to troll. He released that AI video about Gaza. Do you think that's what this is?
George Friedman: As for that letter - I don't know. But if the US president goes further, he faces massive domestic political consequences. His ratings have fallen to the point where most people consider him an ineffective president - just over 50%. At the same time, I think most Americans will perceive this as confirmation of their suspicions that Donald Trump goes to extremes they don't like. So the consequences aren't just between Europe and the US - there are domestic political consequences in the US. Especially at a moment when his extreme actions, for example in Minnesota with ICE agents (Immigration and Customs Enforcement), have alienated many of his voters. He still has significant support, but not a majority. And with the 2026 elections on the horizon, many political questions arise. So his actions have not only global - or even not so much global - consequences, but deep consequences for American domestic politics.
Christian Smith: George, last question on this topic. Many are asking: doesn't this approach to Greenland, this disregard for sovereignty and territorial integrity, give carte blanche to Russia regarding Ukraine or China regarding Taiwan? Like, "we want this - and we'll take it"?
George Friedman: Russia has already done this. They said: "I want Ukraine - I'll take it." China is already doing this. So it's the Americans following the example of the Chinese and Russians, not the other way around. The idea that this somehow legalized or legitimized such claims ignores the fact: such claims are constantly made by different countries to each other. This is yet another exaggeration of the capabilities of the American presidency.
GPF Forecast: A World Without Anchor Seeks a New One
Christian Smith: Alright. Let's talk about something real. The GPF forecast for 2026. Last year's forecast for 2025 was called "A World Without Anchor." Remind us what it was about - this is important before we move to the current one.
George Friedman: Oddly enough, the Cold War was an anchor for the world. Every country could be either a US ally, or a Soviet ally, or neutral. This didn't change quickly. In that sense, the world had an anchor.
For me, the Cold War ended in Ukraine. When the Russian army failed to occupy all of Ukraine, was pushed back from Kyiv and is now stuck trying to hold a tiny wedge of Ukrainian territory - this demonstrated that it's incapable of invading Europe, and that was the main fear of the Cold War.
So two things happened. The US-Russia confrontation that defined the world became obsolete. Russia is nowhere near as powerful as the US. And simultaneously a situation arose where all other countries must redefine their relationships.
We talked about Europe. Europe's relations with the US were built on the Russian threat, the Soviet threat - fear of invasion spawned NATO and everything else. Now, when the Russians have shown their military limits, deep military limits, there's a lot of talk: "After this they'll invade there, here." But if they couldn't take even half of Ukraine, they can't do that either.
So now the world is without an anchor. The anchor that frightened the world and put everything in its place - the Cold War - has clearly ended. This means we're in an unstable position globally. Not in the sense that wars will break out, but many countries don't know where to go. And therefore the world will find itself a new anchor. We think this will happen this year.
Christian Smith: And how will this happen?
George Friedman: In the world there are two great powers with military potential of global scale and enormous economies - the US and China. Russia is no longer a global power. It doesn't have the military capability to operate around the world, and its economy is extremely weak and weakening - ninth or tenth place in world rankings. The US is in first place, Europe, if it ever unites, would be in second - slightly larger than China.
And here's what's happening: what will the relationship be between the US and China? This is the fundamental question. During the Cold War, the US and Soviets were hostile to each other and maneuvered around the world on that basis. The US and China were also hostile to each other. But at the same time deeply economically connected. The question is: will the relationship between the US and China, the two great powers, be hostile like during the Cold War? Or will it be something else? I expect something else, for various reasons.
Christian Smith: We're giving an overview of the forecast and don't want to reveal everything. But explain a few reasons why China and the US... This is a question that has occupied analysts for more than ten years: is this Thucydides's Trap (the concept of the inevitability of war between a rising and existing power)? Is US-China collision inevitable? Explain why it isn't.
George Friedman: The Chinese economy took off starting in 1980. One foundation of this takeoff was access to the American economy - they could export cheap goods to the US, and they did so massively. The second dimension of Chinese growth - American investment in China. Investments were enormous. China was and remains heavily dependent on access to the US. The US is 25% of the world economy. If you don't have access to that 25%, and you've built an economy around trade with Americans - consumer goods, technology components - then you have nowhere to go. There's no such place.
So the Chinese have an inherent economic dependence on the American economy. And now because of tariffs they're in deep economic trouble. In China there's significant unemployment, which wasn't there before. The financial system is in trouble. Growth rates have fallen below 5%. In the best times it was 15%. Then it dropped to 5%. Now it seems to be around 3%. The Chinese are in serious trouble. They need access to the American market.
At the same time, the American economy is experiencing a problem of a different kind - not so much inflation as declining price affordability of goods. Many goods from China were cheaper and gave consumers access to various products - for example, in pharmaceuticals Chinese supplies were critically important. Prices have risen. And as prices rise, pressure builds within the US. The US's economic problems are smaller than China's, but they exist.
So from an economic standpoint, the two countries need to negotiate. The question is: how to negotiate and be interdependent while maintaining a hostile military posture? That's what needs to be resolved.
How a US-China Agreement Might Look
Christian Smith: To understand exactly how the two countries might find compromise, including on Taiwan, you need to read the full forecast. But let's at least in general terms: what might this agreement look like? You say they need to reach a military and economic agreement. What will this be in practice? What will the world become?
George Friedman: To understand this, you need to remember the Arab oil embargo after the Arab-Israeli wars. The Arabs stopped selling oil to the US. In the 1970s this destroyed the economy. It was in terrible shape when we had no oil. Gas stations had no gasoline. The Arabs used their economic power over the US to punish America for supporting Israel. Eventually it passed. But when you have hostile military relations, the economic side becomes a weapon that can be used.
For example, if China stops sending all the goods it sends to the US or sent before, in case of war the American economy would suffer greatly - we've become deeply dependent on cheap Chinese products. But the Chinese would also suffer if they start a conflict: they need the American market.
In other words, the negotiations that are happening now are happening in two dimensions. The first is economic, tariffs. The second is how to achieve military understanding. How to prove to each other that we're not hostile?
One small way - each side notifies the other of upcoming military exercises, and then they know these exercises aren't a prelude to attack, and this calms the situation. Military agreements can be reached. They're somewhat more complex than economic ones, but we can't depend on a country we might go to war with. And China can't economically depend on a country it might go to war with.
So reducing military tension and returning the economy to something that supports both countries - this is a necessity. This is more than an economic discussion. This is a general discussion about US-China relations.
And it seems to me that now they're talking seriously. There are various indicators. The Chinese ambassador to the US is saying very positive things about the future of relations - and usually he criticizes the US. Xi has stopped speaking sharply about America. Trump isn't saying bad things about China. Deep negotiations are happening at various levels on various issues. And when you look at the situation - there's no reason for hostility between the US and China, and many reasons to avoid it.
So we're looking at a world very different from the Cold War world, where the two main powers were hostile to each other. The new anchor, as I see it now, is a world in which the two main nations, if not cooperating, are at least not interfering with each other. And even the possibility of cooperation isn't excluded. This would be a radical shift in the geopolitical system everywhere - all players would find themselves in different positions.
Our forecast: this year there's a high probability of achieving an agreement between the two countries, because they need it.
Christian Smith: In a sense, this is the opposite of a western: this town is big enough for both of us.
George Friedman: Exactly. During the Cold War, when Russia was very powerful, it had a fundamental interest in protecting the western flank through occupation of Europe. The US had a fundamental interest in them not occupying Europe and in preserving access to the Atlantic. And this couldn't be easily resolved.
This relationship between two powers can in a sense be resolved. If you look at the past - there was a great struggle between Britain and France. Periodic wars. But in the long term they coexisted most of the time. Sometimes there were outbursts. But these two great imperial powers, which occupied most of Africa, Asia, the Western Hemisphere for a very long time - they ultimately came to an agreement based on economic necessity. So this isn't unprecedented. Not easy, but I think there's movement in that direction.
Russia: A Regional Power, No More
Christian Smith: I'll note that I didn't try to imitate a Texas accent, since you're in Texas, George - I don't think that would be appropriate. Let's talk about Russia in more detail. This "new world" - the term is being used left and right now - will mean a lot for Russia. As you said at the beginning, they're not the power they once were. How will they cope with this bipolar world of which they're absolutely not a part?
George Friedman: First, it's important to recognize: Russia is not a global economic power in any sense. Even internally it has economic weaknesses. In this respect, it's no match for China or the US. It's out of this game.
Second, it's not a global military power. It has the ability to start a global nuclear war, but it's unlikely to do so because it would be destroyed itself. But as for the ability to project conventional military force (that is, to operate beyond its borders) - after the Ukrainian catastrophe, when the Russians invaded and four years later are still fighting without success... Russia doesn't even look like a major regional power. To the extent it is a power - it's a regional power, not a global one. It simply cannot project power the way China potentially can, the way the US regularly does. The Russians simply don't have that capability.
Yes, they can engage in various subversive operations, send intelligence services to various places. But they're not a global power. They've lost the eastern flank - Central Asia no longer belongs to them. They've lost the South Caucasus - after the peace agreement between Armenia and Azerbaijan mediated by Trump, the region is turning to the US. These were parts of the Russian sphere of influence. And recently in Chechnya, where they suppressed a major uprising - it was a terrible war - it seems it might revive again. So there are problems inside Russia. They're simply not in the league with the US or China, and therefore they're not a great global power. A significant regional power, perhaps, but no more than that.
Christian Smith: Since we're on the region - looking forward, one of the main warnings from European generals in recent years: Russia might try to attack a Baltic state, especially Lithuania or Latvia. What do you think about this? Obviously, Russia has performed poorly in Ukraine, but Lithuania, Latvia, Estonia - they're small countries, you can cross them in a few hours. Is this a real risk? Or will Europe manage on its own, even if the US is less involved?
George Friedman: The fact is that the Russian army isn't very effective. It's ineffective in using satellites and integrating them into operations. Ineffective in developing new operational nodes. And they're still fighting years later on a very narrow and limited front. The idea that, having failed so badly in a neighboring country they were supposed to capture in a few months, they'll now decide to project force in other directions - assumes they have force to project. If they had it, they would have used it in Ukraine. Because in Ukraine for four years they've been fighting and thrown everything they have at it.
The idea that they're hiding an army... Remember: they're conscripting 50-year-old men and recruiting mercenaries in Africa because their forces are exhausted. There's some strange psychology around Russia - that it's a great power capable of projecting force somewhere else. If it had that force, Ukraine would long ago be in its hands. They would have used it.
So I don't take this seriously. Plus: a German tank brigade is now stationed in Lithuania. Maybe it's not enough to stop a Russian invasion, but it would definitely provoke massive NATO intervention. Poland has become a very strong military power. In an attack on Lithuania, the Russians would have Poland on their flank. And the Poles would definitely counterattack - they fear for themselves.
The configuration of forces - this is a reality that's not what we imagined it four or five years ago. It's a completely different reality. We're attributing to Russia forces it doesn't have, and strategies it cannot implement. The idea circulating everywhere - that, having failed in Ukraine, they'll succeed in Lithuania because it's smaller - this isn't reality, given other elements like German forces.
India: A Bright Future, But Second Tier
Christian Smith: The forecast also includes assessments of all regions of the world, as I said at the beginning. Let's look at South Asia as an example, specifically India. India, as we've discussed in the podcast before, has come under American tariffs in recent months. How will it cope, how will it find balance in this world? It's one of the fastest-growing economies, it has perhaps the greatest potential. What's its place? How will it manage the situation?
George Friedman: It's a very important place. But remember: when we talk about global powers, we're talking about those who can have both economic and military reach. The Indians don't have that yet. Maybe they'll develop it. One of their problems - China is very nervous about India's development. And if the US and China reach an understanding, the Americans are unlikely to violate that understanding by arming India.
Remember, the US at some point flirted with the Indians - partly, I think, to make the Chinese even more nervous about the possibility of deploying forces there. But I think India will become a great economic power, a very significant military power you wouldn't want to mess with. But will it be able to project power globally? That's another question. So its future is bright - definitely brighter than Russia's now. But at the same time, I don't think China is ready for any war with it. I don't think anyone else, including the Pakistanis, can really handle it. So it's secure. It has a powerful economy. It will be very close to the first tier, but still in the second.
Christian Smith: And in the short term - they have these American tariffs. What does your forecast say awaits them in 2026?
George Friedman: I think these tariffs will begin to be reconsidered as we move through 2026. The question of "price affordability," as it's now called instead of "high prices," will be very relevant. Trump's popularity rating is now negative. Those who think he's doing poorly - around 57%. Those satisfied with his work - around 40%. The rest have no opinion.
So Republicans are in serious trouble. Recent events in Minnesota, which much of the world may not know about - there an ICE agent shot Rene Goode, an American citizen, and the video of the killing doesn't seem to justify this act. This is a very important symbol in the US. American politics are also changing. Always, when a president is elected to a second term, his opponents get big advantages because he hasn't fulfilled all his promises. In this case, everything is somewhat more extreme. Problems with ICE, economic problems are playing against him.
Now the question is that all Republican senators and congressmen who are worried about keeping their seats have slowly, quietly begun to move away from unconditional support. And this is very significant.
Second, the Supreme Court will be considering much of what he's done this year. Last year they didn't consider it - it was premature. But this year they will. I can't predict what they'll decide, but there's much speculation that they held back in the first year, and in the second will come with decisions that will really limit what he can do.
Christian Smith: Yes, nobody knows yet what they were going to decide - perhaps on the day of recording, but ultimately it was unknown what they were going to do. There were assumptions they might announce a decision, but they didn't. So in that sense, George, let's wrap up: the tariff situation for India, but more broadly - the situation many countries find themselves in relations with America - could it change this year partly due to internal pressure on the current administration?
George Friedman: Partly. But American dependence on imports is a weakness. If supplies are cut off, like during the Arab oil embargo, it hits us. It makes sense for the US to limit dependence on other countries except close allies. But Trump takes this to an extreme - he wants to moderate relations even with close allies. He needs to find balance in his own thinking and relate it to the changing political realities in the US. And this will be difficult for him.
In 2026 we'll see more storms. As resistance to Trump grows - and it always grows for all presidents in this period - Trump's tendency to act aggressively will create political tension within the US. And this will dominate, together with the Supreme Court and its decisions.
Christian Smith: Well, George, let's end on that. Thank you, as always. Thanks to everyone listening. Be sure to visit geopoliticalfutures.com to see the forecast - there's much more material there, very interesting. I'll be back soon with a new podcast, but for now - take care and goodbye.
