Geopolitics, trade policy expected to shape disputes landscape in 2026: report

March 16, 2026

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Geopolitical pressures are heavily influencing disputes risks, and 82 percent of organizations are concerned about being subject to a cross-border or multiagency investigation in 2026.

In addition, respondents point to cybersecurity and tax as their top dispute and investigation risk areas this year across a diverse, high-stakes risk portfolio. These challenges are part of global law firm Baker McKenzie’s ninth Global Disputes Forecast.

"We find ourselves in a paradox,” said Sunny Mann, global chair of Baker McKenzie, in a statement. “Organizations are more globally connected than ever, yet operating in an increasingly fragmented and unpredictable geopolitical environment that is fundamentally altering risk calculations.

“The challenge for multinationals is that global integration, once seen as a hedge against risk, has become a vulnerability: supply chains cross contested borders, data flows encounter sovereignty barriers and business relationships can become compliance liabilities overnight as political alignments shift,” he said.

“A primary mitigation technique among our clients is one of diversification across supply chains, customer base, funds flows, data storage and business and investment partners. Overreliance on a single party or market is a vulnerability."

Baker McKenzie’s forecast is based on a survey of 600 senior in-house lawyers from industry-leading multinationals across several sectors, including industrials, manufacturing and transportation; consumer goods and retail; healthcare and life sciences; technology, media and telecoms; financial institutions; and energy, mining and infrastructure.

Key findings
The latest Global Disputes Forecast highlights that organizations are entering 2026 feeling disputes pressures from all sides.

Alongside technology-related risk and operational and supply chain disruption, geopolitics and trade policy are also central concerns, with 79 percent of respondents identifying tariffs, sanctions and export controls as major external market factors increasing their exposure to disputes.

This geopolitical reality is driving fears of cross-border and multi-agency investigations, with 82 percent of organizations worried about being subject to such scrutiny in the coming year.

At the same time, threats across cybersecurity, tax, employment and ESG disputes remain top of mind for legal leaders.

Addressing such an expansive set of risks necessitates a delicate balancing act as organizations manage competing pressures, often with increasingly limited resources.

Thirty-eight percent of respondents say their disputes budget for 2026 is inadequate to meet current risk levels, with funding and resourcing constraints cited as the top barrier to litigation preparedness.

The forecast also highlights that tax emerged as the second greatest area of concern for both disputes and investigations, likely attributed to the growing complexity of cross-border tax compliance, new international tax frameworks and increased scrutiny from authorities, which are leading to more frequent and high-stakes tax controversies.

Key disputes trends: 2026 snapshot
According to respondents, the following types of disputes present the greatest risk to their organization in 2026 (ranked by the percentage of respondents identifying the below as their single greatest risk):

Data privacy/cybersecurity: 18 percent

Tax: 12 percent

Trade sanctions/export controls: 11 percent

ESG: 9 percent

Employment: 8 percent

Product liability and consumer disputes: 7 percent

AI-related (e.g., bias, liability, misuse): 6 percent

Antitrust/competition: 6 percent

Commercial/contract: 6 percent

Intellectual property/patents/trademark: 6 percent

Brand/reputation: 6 percent

In 2026, organizations’ top risks for both disputes and investigations are the same: cybersecurity and tax.

Cybersecurity and data privacy disputes (18 percent) and investigations (17 percent) are now an inescapable reality of more digitized processes and operations in the face of an ever increasing and more complex cross-border regulatory matrix and cyber-attacks that grow in sophistication almost daily.

Tax emerged as both the second greatest dispute (12 percent) and investigations (11 percent) risk, reflecting the complexity of navigating cross-border tax compliance, transfer pricing scrutiny and shifting international tax frameworks.

For example, notwithstanding the Jan. 5 Side-by-Side Package, which introduced a number of favorable safe harbors, the OECD’s Pillar Two global minimum tax will continue to add a layer of tax complexity worldwide for both US and non-US parented multi-nationals.

The roll out of the global minimum tax has added layers of complexity, and jurisdictions around the world are still grappling with how to balance implementing the global tax mandate into domestic law, and establishing effective and manageable reporting and compliance mechanisms.

Additional concerns include developing the necessary skills to be able to administer and audit a regime that requires familiarity with the nuances of multiple accounting standards and domestic tax systems.

Against this backdrop, businesses should prepare for Pillar Two disputes in all material jurisdictions.

Trade sanctions and export controls, ESG and employment also ranked among top concerns, emphasizing that, alongside urgent pressures, organizations are addressing a diverse portfolio of risk more broadly.

Technology, geopolitics and supply chain disruption drive external disputes risk
The rapid deployment of AI and the increasingly complex cybersecurity threats and data privacy regulations have made data-driven risk the top external driver of disputes exposure in 2026, with 80 percent of respondents citing it as a concern.

Governments are seeking to shore up national security interests, particularly in critical infrastructure sectors such as energy, water, food, technology, health and financial services.

This is prompting the creation of cyber laws that impose new reporting obligations, such as the EU’s NIS2 Directive, the US CIRCIA and Singapore’s Cybersecurity Act.

These laws require critical infrastructure operators to report major cyber incidents within a stipulated time frame to protect national security and essential services.

At the same time, 79 percent of organizations view geopolitics and trade policy as a threat, as sanctions, tariffs and export controls disrupt global operations and create uncertainty in cross-border contracts and enforcement.

Concerns over geopolitics and trade policy are felt particularly acutely in Germany (84 percent) and the U.K. (84 percent), reflecting the vulnerability of foreign trade-heavy economies.

Operational and supply chain disruption, a concern for 78 percent of respondents, also continues to test organizational resilience.

Resource constraints expose vulnerabilities in organizations’ risk-readiness
Over one-third, 38 percent, of organizations report that their 2026 disputes budget is insufficient to meet current risks, which can lead to slower and less effective responses to disputes.

Organizations with limited resources struggle to investigate issues thoroughly, engage specialist counsel or manage multiple cases at once. These constraints reduce flexibility and increase the risk of delayed or reactive decision-making when disputes escalate unexpectedly.

Funding and resource constraints (55 percent) and inability to keep pace with regulatory developments (52 percent) have also emerged as organizations’ greatest barriers to litigation preparedness.

Barriers such as addressing supply chain vulnerabilities (47 percent) are felt most acutely by sectors with complex and sensitive supply chains, such as industrials, manufacturing and transportation.

Cross-border investigations pose a significant threat in 2026
A remarkable 82 percent of respondents fear that they may be subject to a cross-border investigation in 2026, while data preservation/forensics (52 percent) and cross-border coordination (48 percent) come out as the top areas organizations say present a challenge for their preparedness for investigations. This underlines a disconnect between the looming reality of cross-border investigation risk and organizations’ ability to overcome it.

Concerns over the likelihood of being subject to a cross-border investigation are felt particularly acutely by respondents in Singapore (88 percent) and Hong Kong (85 percent). This is likely due to their positions as major regional hubs for cross-border trade, financial flows and data movement, as well as a surge in whistleblowing activity in the Asia Pacific region.

Modern arbitration requires adapting to complexity
International arbitration continues to be a cornerstone of cross-border dispute resolution, valued for its flexibility, neutrality, confidentiality and enforceability across borders.

In the medium term, organizations expect the greatest challenges for international arbitration to arise from digital transformation and data security, cost and duration, and geopolitical issues.

Adoption and integration of technology and data security, particularly cybersecurity threats and the ethical use of AI, are expected to present challenges in areas such as virtual hearings, digital evidence management and legal research.

Please click or tap here to access Baker McKenzie’s ninth annual Global Disputes Forecast.

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