Gourinchas said there had been little historical precedent in 2025 and 2026 for building a credible baseline forecast. That forced economists to work with a range of possible outcomes rather than relying too heavily on one central projection.
The message for markets is clear: uncertainty is not just a temporary background risk. It has become a central feature of the global outlook.
Tariffs are reshaping global trade ties
The second major concern is the reordering of global trade.
Gourinchas said trade flows and relationships are clearly shifting after US President Donald Trump’s tariffs. He pointed to the European Union’s completion of trade agreements with Latin America and India after long periods of negotiation, arguing that countries are now under pressure to deepen trade links with partners outside the United States.
This suggests that tariffs may produce short-term leverage, but also encourage countries and companies to redesign supply chains, seek alternative markets and reduce exposure to pressure points in the global system.
Sanctions and pressure tools may lose force over time
Gourinchas also warned that tariffs and economic sanctions often have limited long-term effectiveness.
His argument is that while countries may gain leverage in the short term, the targeted side does not remain passive. Governments, companies and consumers eventually adapt by finding new routes, accelerating domestic innovation, building new trade partnerships or bypassing restricted channels.
That makes the world economy harder to manage. Instead of one unified global trading system, the risk is a more fragmented network of blocs, alternative routes and competing standards.
Risks and opportunities for Asia
For Asia, the warning has two sides.
The risk is that trade fragmentation, tariff uncertainty and energy volatility could hurt export demand, raise logistics costs and complicate investment decisions. Economies that rely heavily on manufacturing, shipping and imported energy would be especially exposed if oil prices rise again or global demand weakens.
The opportunity is that shifting trade ties could also redirect investment and supply chains towards countries seen as stable, cost-competitive and well connected. As companies look for alternative production bases and new regional partnerships, Southeast Asia could benefit — but only if governments can offer policy certainty, infrastructure readiness and predictable regulation.
Global economy not collapsing, but harder to stabilise
Gourinchas’s warning is not that the global economy is heading for immediate collapse. The stronger point is that it is becoming more difficult to predict and harder to stabilise.
Oil reserves have already been used to soften one shock. Trade patterns are being redrawn by tariffs and sanctions. Geopolitical risks remain high. And policymakers may have fewer tools available if the next crisis arrives before the global system has rebuilt its buffers.
For governments, central banks and businesses, the lesson is that resilience now matters as much as growth. The next phase of the global economy may be defined less by rapid expansion and more by how well countries can withstand shocks that are increasingly political, energy-related and trade-driven.
