BBC correspondents' look ahead to 2026

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0:39Hello, I'm James Kamara-Sami and this is the Correspondence Look Ahead to 2026 here on the BBC World Service. Over the next hour, I'm going to be speaking to BBC correspondents around the world about the people and places, the trends and technology that they're going to be keeping an eye on over the next 12 months. Much of that will be shaped... by what has already happened in 2025. We entered the year still focused on the wars in Ukraine, Gaza and Sudan. Now people are worried about conflict spreading further. Topics like trade, technology, migration and the health of democracy have helped to shape politics around the world.

1:18So will they continue to be the hot-button issues for the year ahead? And of course, one of the biggest stories of 2025 has been the return of Donald Trump to the White House. a man with something of an outsized influence on the rest of the world, be it economically, politically or indeed militarily. And we're going to begin the programme with the US President and the United States in general. Joining me from Washington are Anthony Zerker, the BBC's senior North America correspondent and Asma Khalid, co-host of the Global Story podcast and before that, a White House correspondent for National Public Radio NPR.

1:57Great to have you both with us. It's great to be with you. Good to be here. Anthony, we're going to start by saying, and we have to be clear, we are recording this on December the 17th, and things can move very, very quickly in Washington, can't they? But barring something major happening between now and when this programme airs, what do you think of Donald Trump's state of mind as he looks towards 2026? How do you think he's feeling his first year back in the Oval Office has gone? Well, if you listen to Donald Trump and his senior advisors, they're feeling good. They think this has been a historic first year of a presidency.

2:35They ticked through all of the various accomplishments that the president has put on his records, such as changing trade policy, massive cuts to portions of the federal government, rolling back the bureaucracy state in their view. They think that they've spent more money on defense. They passed a big tax cutting package. They have ramped up immigration enforcement. One of the things Donald Trump boasts about time and time again is how very few people are crossing the U.S.-Mexico border right now. So I think they do have a valid claim to having accomplished a lot and pushed the boundaries of presidential power and presidential authority in ways that we have not seen in a modern American presidency.

3:21Now, that's what they'll say publicly. I think behind the scenes, they have to be worried about the trend lines. They have to be worried about what next year has in store. There are signs that the economy is starting to slip, that unemployment is ticking up. Inflation is still a concern. They have to be worried about how Democrats are doing in some of the special and local elections we've seen over the course of the year, that next year's midterm congressional elections could be a bad one for Republicans. So there are storm clouds on the horizon for them, even as they talk about what a golden age this is becoming for America.

3:56Asma, let's look ahead to those midterms. What is at stake in them? Oh, there's a lot at stake, I will say. I mean, in a nutshell, the party in power traditionally never does well in a midterm. And Donald Trump has mused on that already, hasn't he? Yes, I think setting expectations right a bit here. But I mean, look, I think that there are definitely challenges for the Republican Party. And I think the clearest indication of that is the off-year elections we saw this year. So we saw governor's races in both New Jersey and Virginia. Democrats won in both of those. You saw a mayoral race in Miami and you saw for the first time in nearly 30 years a Democrat win that race.

4:36In terms of that, I think there's a lot of discontent among voters. There is still widely perceived to be a crisis of affordability. If you look at polls, it shows that Americans remain frustrated with the cost of groceries and the cost of utilities. I will say increasingly that the Trump team seems to recognize that that is a weakness and you are likely going to see them more actively campaign on this ahead of the midterms. People say this all the time, but American voters really, really tend to vote based on their pocketbooks. Right. And when you talk about the midterms, I mean, let me lay out what's at stake in November.

5:07Control of Congress, control of the House of Representatives. When you talk about control of Congress, Democrats don't have any power in Congress right now. If they get a foothold, if they get just the House of Representatives, that gives them the ability to block Donald Trump's agenda, to engage in oversight, issue subpoenas, really be a thorn in Donald Trump's side. It would be a very different last two years of Donald Trump's presidency if the Democrats do manage to pull off that win in the House. If I can just ever so briefly mention one other thing I think that really poses a substantial risk for Donald Trump and Republicans heading into the midterms, and that is health care costs.

5:44Health care is a vexing issue for many Americans, particularly the high costs. And what we are expecting to see at the end of this year, subsidies for the Affordable Care Act, shorthand note is Obamacare, are set to expire. There are no alternative plans right now that I've seen from this White House to counter message on that. And that means many people will not just be frustrated with the high cost of groceries. They will also be increasingly frustrated with the high cost of health care. Can I just ask, Asma, what type of Democratic Party, though, do you think we will see in these midterms? The energy seems to have been with the left, the more progressive side of the party this year, the likes of Bernie Sanders, AOC.

6:25Obviously, we saw the victory of Mandani in the New York mayoral election. What's your sense of where the party is going? I think that's an excellent question, but I think it's one that the Democratic Party as a whole at a federal level is probably going to try to somewhat punt on because they can. In midterms, they can run different candidates in different races depending on local demographics. It allows them to run different style candidates, perhaps a more moderate candidate in one area and a more progressive in another. But to the bigger question of who's the leader of the Democratic Party, there's still a lot of soul searching and frankly, no answers.

7:01Right. And in those off year elections, you had people like Abigail Spanberger running as a centrist in Virginia and winning. And then you had Zofran Mamdani running as a Democratic socialist in New York City and winning. And so that big debate within the Democratic Party about what the party should look like and their progressives who really think that the Biden years, the four Biden years was too centrist, too cautious, wasn't aggressive enough, wasn't rising to the threat of Trumpism and the Republicans. They're not going to be quiet and they're going to keep pushing. But at least right now, they have a common enemy with the centrists in the Democratic Party, and that is Donald Trump.

7:40That is going to be trying to get control. Once they get control, I think that's when you'll see the division start to emerge again. Well, one thing there hasn't been any question about thus far is who is the leader of the Republican Party. Donald Trump's had such a grip on it for so long. But, but, but, but are we starting to see a change? Yeah, I think there are cracks and part of it's natural, right? This is the second term of a president. And you don't have to get too far into a president's second term before there's talk of lame duck, someone who can't accomplish anything. They're just kind of marking time until they leave office.

8:16And thoughts within the party turn to who is going to be the next person, who is going to be the heir apparent. And we're seeing some signs of that. We're seeing people like J.D. Vance, the vice president, and Marco Rubio, the secretary of state, and others start to kind of jockey maybe a little bit for position to be the Republican nominee in 2028. I also think that Donald Trump's not that popular right now. If you believe opinion polls, they suggest that Donald Trump's opinion is sagging down. His approval is down in the low 40s, high 30s. And when that's the case, members of the party have to start thinking about their own skins and they have to think about what they have to do to survive because Donald Trump doesn't have to run for an election again, but they do.

8:59They're thinking much longer term than Trump. And so you start to see people try to get a little daylight between themselves and the president, try to distance themselves. And when it comes to the ballot box, you see members of his coalition that helped deliver the White House to him last year. People like Hispanics, minority voters, low income voters start to peel away and support Democrats. So it's not all sunshine for Trump right now. Part of that's natural. But part of it also is what he has done and his approval ratings at the moment. Well, let's turn to foreign policy. Asma is a co-host of the Global Story podcast.

9:33You're probably the person we should talk matters global to, first of all. One of Donald Trump's big mantras has been America first, but he's been pretty occupied with wars elsewhere during 2025. What do we think America first is going to mean in practice in 2026? Thanks. I've been so struck this second term of Trump's presidency by how involved and how interested he is in what's going on with the rest of the world. So I will say he was likely to continue to be very involved in a number of global conflicts. One key one I will say here is Ukraine. He pledged that he would solve it on day one. He has not yet been able to do that.

10:15It's an ongoing issue. And thus far, we have continued to see his administration involved in trying to find a solution to end that war. The other thing I'll point out here is the Gaza Stabilization Force in the Middle East. There's talk of potential U.S. forces on the ground. So that may keep him very involved there in the Middle East. And then lastly, I will say, and we saw this a bit in the big national security strategy document that his administration put out recently, they are very involved in trying to assert American, United States dominance and leadership in the Western Hemisphere, which largely means the Caribbean, Central America, and South America.

10:52And we keep getting drips and drops of potential possible intervention there in Venezuela. Right. Donald Trump, when asked about America first and whether his policies were America first, he says America first is whatever I say it is. I created it. I'm the one who can say whether it involves all of these various dalliances and different conflicts around the world or not. Now, whether the rest of the people within his movement agree with that or not or ride with him on that or not, I think that is going to be one of the big questions over his second term in office. And one of the things you typically see presidents do in their second term is kind of focus more internationally.

11:31Presidents have more authority there. They're looking to try to burnish their legacy. Donald Trump talks about this all the time, talks about wanting to be seen as a peacemaker, to win the Nobel Prize, to be able to solve wars. He boasts about all the wars he supposedly has ended during his first year in office. But it's going to be a source of friction between himself and his base, because if he focuses on international issues at the expense of domestic issues, and if things here domestically aren't going well, particularly with the economy, I think a lot of his supporters are going to kind of sour on that because that is not what he campaigned on.

12:08It wasn't what he the way he governed in his first four years in office. And yet it does, as Asma mentions, seem to be a very big priority for him this time around. Yeah. Just on that point, we don't know how things are going to develop in Venezuela. But clearly at the moment, there is a lot of focus on what's been going on in America's backyard, the kind of military strikes that have taken place. I mean, how do you see this developing? There is certainly a sense that the United States would prefer a different leader in Venezuela. Now, whether that actually leads to regime change, we'll see. I mean, I know we're taping here on the 17th, so maybe things will evolve by the time this airs.

12:51We saw just this week the president call for a total and complete blockade of sanctioned oil tankers around the waters of Venezuela. You mentioned the bombing of boats there in the Caribbean. This has been a steady drumbeat towards possible military, possible covert action in Venezuela. But I will say, look, James, I don't think it's only limited to Venezuela. We've seen him take a different tactic writ large with describing fentanyl as a weapon of mass destruction, intervening there and putting his stamp on who he thought the new elected leader of Honduras should be, offering a bailout, for example, to the Argentinian president, Javier Millet.

13:32President Trump in this term has been very keen to focus on Latin America, Central America, and ensure that he is able to, to the degree that he can, maybe in words, try to tip the scales towards those leaders he feels more comfortable with, more of a kinship with, and make it very clear those who he does not like. And even if it isn't clear in Donald Trump's own mind, the kind of overarching policy here, there are people around him who have been very explicit, including Marco Rubio, the Secretary of State, about moving the United States' foreign policy to one almost like a 19th century kind of view of spheres of influence, that the Western Hemisphere is the United States' sphere of influence.

14:11It's interesting to see this over the course of this year play out. And Venezuela, with this massive buildup of U.S. forces, Donald Trump called it the biggest armada in the history of South America. But if you look, it's about 15 ,000 American servicemen in the Caribbean, which typically has a few hundred, a carrier group, a nuclear attack submarine, an amphibious invasion assault team, all of these planes and various support staff. It is a massive buildup to what end? And I think we'll see. We will see. We will see. One of the big foreign policy tools that Donald Trump has plucked from the past, of course, is the use of tariffs, trade tariffs, taxes on imports.

14:58It's something he's dabbled in before, spoken about for years, but now it seems to be, well, one of the central tools of his global diplomacy. To talk about this and a bit more of the economic focus in more detail, we've got the BBC's economics editor, Faisal Islam, here with us. Hi, Faisal. Hello. Well, look, Let's start with tariffs. The big gun that he pulled out earlier this year. Just remind us how they work and what he's been seeking to try and do. Well, he did promise it during his election campaign. That was now 2024, wasn't it? But it wasn't hugely focused on or taken seriously as it should have been.

15:37And we got the policy in spades this year, didn't we? Most famously with that infamous blue board on Liberation Day held up in the White House. and essentially they are taxes on your imports. That's the bottom line and America has historically kind of waved through those imports with very low rates of tariff and that has helped the American consumer buy the goods of the world cheaply. This was a fundamental change in approach and the interesting thing at the beginning of the year was that it was done for several reasons at the same time, some of which were contradictory, which added to the confusion across the world.

16:12So it was being done to raise revenue. It was being done to protect US manufacturing jobs and to bring back indeed US manufacturing jobs. It was being done, though, also as a tool of various types of diplomatic policy as a form of leverage. And indeed, that has been the most intriguing use. OK, so has this policy worked and going forward, is it going to be pursued in 2026? Well, I think it is going to be pursued. We haven't seen the full domestic economic impact yet. So primarily, the prediction would be that prices would go up. That has begun to happen in certain sectors upstream. We haven't seen it really come through as hard as you might expect, but we're told it's coming.

16:58So what happened was that manufacturers, importers swallowed it in terms of margin. Some exporting countries too, there was some pressure put there. It has raised some revenue for the US Treasury. But what we haven't seen, apart from with China, Canada to some extent, and some other European countries, is sort of mass retaliation. We haven't seen the tit for tat. We did see it with China, where there's essentially the two rutting stags of the world economy going head to head, trying to dare each other to go higher to almost ludicrous levels above 100%, which basically would have cut off all trade.

17:31Asma, can I just bring you back in? Looking ahead to 2026, the impact of tariffs on US consumers, both economically and perhaps politically, how do you foresee that? Well, the biggest unknown is this looming Supreme Court decision on tariffs. The case came in front of the highest court here in the United States. It's really unclear what could happen. I mean, look, there is a possibility that the Trump administration may lose. And that means that they would have to sort of figure out an alternative here. The legal basis that's up for question is this law from the 1970s that historically has not been used for tariffs.

18:12It is the basis, the justification that the Trump administration is using now. And legal experts question the authority that the White House has to do that. already you're seeing some American companies. I mean, I'm thinking of Costco. I don't know if that's elsewhere, but Costco is a big warehouse here in the United States. They sell pretty much anything you need. They have filed a lawsuit to try to get the tariff refund if indeed the Trump administration loses in front of the Supreme Court. Faisal, what would you say are the other big challenges then for the global economy in the year ahead?

18:42Well, one of the things that's cushioned the American economy over the past 12 months, which whatever the direct impact of tariffs it's been unbelievable uncertainty one of the things that's cushioned the u.s economy through this uncertainty has been this astonishing ai and tech boom some argue it's a bubble you see it in the stock markets you see it in the price of the massive u.s tech companies are you going to call it for 2026 well well i mean okay famously we started the didn't we with that picture at the inauguration with the five tech bro broligarchs as some call them lined up behind a tremendous projection of power.

19:19And the sheer amount of market caps, the value of these companies has gone up and up and up by the trillion as a very real investment boom has underpinned that. So you have both a very real astonishing increase in physical buildout of data centres, everybody trying to get hold of the world's most powerful chips, this race happening within the US. You have a stock market going crazy around it, crazy in the sense of like, everyone wants a piece of the action but there are some elements of it and the question is just how much is frothy bubble territory built not on solid revenues but built on massive borrowing and that has gone too far we've done a number of interviews here at the pbc with some of the tech titans involved where it's clear that although they think that they're fine they can spot around the corner various parts of their industry have gone a bit over the top so the question for me in 2026 is the sustainability of that because if it does go pop if it's anything like the dot-com bubble of 2000 that will be a profound moment not just financially and economically but also politically potentially geopolitically but what's really interesting in the past two or three months is that those tech leaders in silicon valley are now saying that energy is a key constraint so i've talked about financial sustainability what about energy sustainability in terms of just is there enough energy for this build out of data centers and of chips that's in america where they have a pro-energy kind of white house determined to tear down barriers it's creating some pressures in europe about the trade-off between wanting to not get too behind on this ai race but then also having climate change everyone says well you can it's fine we can do everything at the same time But actually, there are some trade-offs here.

21:01If things do go south, what does that mean for everyone? So the benign version of this is that the major tech companies still show their worth and are somewhat protected or insulated. But there are those on the periphery that are highly indebted that just go and we'll see bankruptcies. even in the dot-com bubble 25 years ago almost exactly what we saw there which was really interesting is we saw companies collapse in value like amazon you know fell to six dollars i think from over a hundred dollars and yet amazon is still here 25 years later and worth trillions likewise google hadn't floated at that point was just being born and it is now worth nearly four trillion so it's not to say that the underlying technology is not sustainable and will not transform the world.

21:49But the sheer state of the investment boom we're getting, the sheer amount of money pouring in, you know, we saw it even this year and people forget it's been a long old year, Jamie, right? You remember in January of this year, just after we saw that projection of American power, Donald Trump, the inauguration, those five tech bros, within a week, we had this unknown hedge fund in China as a side project to develop its own chatbot, LLM, large language model called DeepSeek. And that led to a mini correction in the share price of all these companies. And China has, you know, that has been what the Chinese have carried on doing in the background.

22:28And the business model there appears to be, okay, the Americans can compete to have the strongest, cleverest, smartest, closest to general intelligence model you can get. And they will pour all the energy and they will pour trillions into it. But perhaps what the world needs and wants is in fact a more energy efficient, cheaper, more basic model. And that's where the Chinese are operating. It reminds me of the famous analogy in the space race between the Soviet Union, the Americans developed tens of millions of dollars, developed a gravity defying pen and the Soviet Union developed a pencil. Now, of course, the Americans won that war eventually, but it's well worth watching the obscure end of the Chinese AI market to see if they come up with more deep seeks in 2026.

23:14A fight between a pen and a pencil ending our discussion on tech. Fantastic. Faisal Islam, Anthony Zirka, Asma Khalid, thank you all very much. Time for us to take a short break, but after the news, we'll be talking to Laura Bickett in Beijing, to Mayeni Jones in South Africa and to Lise Doucette, who is here, there and everywhere. I've spent the last three decades trying to better understand money across the boardroom, the newsroom and the trading floor. That's longer than most podcast hosts have been alive. But even though I've got questions, join me, Merrin's Upset Web, every week for my show, Merrin Talks Money from Bloomberg Podcasts, where I have in-depth conversations with fund managers, strategists and experts about how markets really work.

24:00And join me for a separate episode where I answer listener questions and how to make those markets work for you. Follow Merrin Talks Money on Apple Podcasts, Spotify or wherever you listen.

24:12Hello and welcome back to the Correspondents Look Ahead on the BBC World Service. I'm James Kamara-Sami and I'm talking with some of the BBC's global correspondents to find out what's in store for the world in 2026. We have been talking about Donald Trump and the impact that AI might have on the global economy in 2026. We're now going to turn our attention to other parts of the world, although I suspect Mr Trump and AI might figure in conversations there as well. We're going to start with the world's second largest economy, China. And Laura Bicker, the BBC's China correspondent, joins us now from Beijing.

24:48Hello, Laura. Hello. How are you? Very good, thanks. Well, look, we've heard earlier on in the programme about how Donald Trump's tariffs have been playing out in the United States. Given that China has been one of the main targets of those tariffs, can you just tell us what impact they have had in Beijing, across China so far, and how you foresee things developing next year? Well, first of all, Beijing pushed back and pushed back hard. And I think if you ask officials here in China about how well China has performed this year, they will say that China has come out top of this trade war. And when it came to these tariffs, Beijing used what it had at its fingertips.

25:31It decided to use its economic leverage against the United States for the first time. And one of the key things it did was limit the US access to rare earth. Now, these are these kind of precious minerals that are used in everything from the smartphone in your pocket to your Bluetooth speaker, to anything, up to advanced weapons, for instance. Now, China processes 90 % of the world's RERA. So you can see the chock hold Beijing has over that precious resource, and it used it to its advantage. Now that it's found that leverage, is it prepared to let it go fully? Now, what we've seen is the trade war has kind of come to some kind of agreement, has eased off.