What Free-Market Economies Must Do in 2026

Excerpt

The past year marked a turning point for the global economy. Economic tensions were amplified. Trade relationships were reassessed. Geopolitical alignments shifted. And the United States fast-tracked efforts to rebuild domestic manufacturing and protect critical supply chains.

While the upheaval of 2025 exposed deep flaws in the free-trade, global economic system of the past three decades, it also created tremendous opportunities to rethink and reenvision our collective economic future. 

As we begin 2026, let’s commit to three innovations for a more resilient, fair, open, and secure economic order.

1. Move from Frictionless Globalization to a Near-Global Economy

For years, market economies—like the United States’—tolerated non-market competition that steadily undermined domestic industrial bases. State-driven economies—like China’s—used access to overseas consumer markets to overproduce, dump heavily subsidized goods at artificially low prices, and build imposing global monopolies. The result was hollowed-out American industries, suppressed prices and wages, and fragile supply chains.

Elaine Dezenski is senior director and head of the Center on Economic and Financial Power at the Foundation for Defense of Democracies.