The world economy splits into rival trading blocs
GEO-01 · probability 74% (confidence 70%, ±10 pts) over 2026-2030 · horizon NEXT 3-5Y · domain geopolitics. Probabilistic simulation, not advice.
The reading
Average US tariffs at their highest level since 1934, Chinese rare-earth export controls, and parallel payment rails mean fragmentation is no longer a scenario — it is the trendline. The open question is depth: a two-bloc split costs the world roughly 5% of real income on WTO simulations, and swing states (India, Brazil, the Gulf) decide how deep the cut goes.
What would prove this wrong
This projection is WRONG if the US and China execute a broad tariff rollback and world goods-trade volume growth returns above 4%/yr for two consecutive years before 2029.
Trigger events tracked
- A new round of tit-for-tat tariffs or export controls between the US and China (semiconductors, rare earths, pharma precursors)
- BRICS+ settlement infrastructure processing a double-digit share of member trade outside SWIFT
- A Taiwan Strait crisis forcing multinational firms into bloc-exclusive supply chains
- EU carbon border adjustment (CBAM) enforcement escalating into a third trade front
Causal chain
Historical precedents
If it happens
Field notes
2026-08-28: Adjudication clarification: the entry is graded on whether the stated event occurred by the resolve date — the falsifiability line is the pre-registered strong-refutation test, not a second event definition. If the COFER threshold is not crossed by 2030, this scores as NOT OCCURRED regardless of the gold-purchase clause. The sealed probability is unchanged.
Sources
Directly related seals
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