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A
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As we ring in the new year, what might 2026 hold in the UK? This is the Marketplace Morning Report by the BBC World Service. I'm Will Bain. Good morning. The last 12 months have brought lots of turbulence to global economies, from fast changing U.S. tariff policies to the rapid accele of artificial intelligence and the trade and geopolitical tensions that have come along with that. So let's hear from some of the BBC's top correspondents on what could be coming up in 2026. We start with the BBC's deputy economics editor, Dashini David and our North American business correspondent, Michelle Fleury. Darshini Tariffs have been the story we knew coming into the year it would be given President Trump's election campaign. But did we underestimate the scale to which it would be a story?
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C
A lot of economists are saying 2026, that's when we'll see it. And guess what? We got it in April, of course, that so called Liberation Day and that big Board of Tariffs. And as the year's sort of gone on, we've been going, oh, hang on a minute, there's some resilience here. Even though we saw a bit of a climb down from the president, various trade agreements coming into place, you know, are things working out in a better way than perhaps some had expected? Certainly this has been the year we saw the world trading order turned on its head much quicker than we thought and much more dramatically.
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B
Yeah, really interesting thought, Michelle. Bring us to and the impact where you are in the US Of a year of tariffs.
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D
It's absolutely true that tariffs when they were first unveiled sent a huge shock not just around the rest of the world, but also in America. The scale of those Liberation day tariffs on April 2, when we had the board and which were quickly ratcheted up in the case of China to over 100%. I think people didn't expect it to go that hard. I think now the expectation is that the impacts are still because they were delayed, because we saw that back and forth, they're actually going to show up in 2026.
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B
What does the resilience look like then in the US right now you're seeing.
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D
A kind of two pronged economy. I mean, I think economists refer to it as K shape. And by that I mean that those who have more money and especially those who are more maybe exposed, in other words, have money in the stock market, are feeling probably not too bad at the moment. The AI boom that we keep talking about is creating a wealth effect where people are feeling actually, you know, I'm going to spend more on holidays. If you look at the most recent black here in the United States, early reports suggest that it was the higher income shoppers who were spending the most. But at the bottom end, the savings that were built up by people after the pandemic because they had nowhere to go and spend their money, that has all been starting to run out. They're racking up more credit card debt and they're struggling with higher prices.
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C
I think you can divide the rest of the world into three camps at the moment, and that is that there are the countries that you would have thought would have done really badly out of this, for example, China and Brazil, who've actually done quite well. And that's because they were already looking at other sort of revenue streams. Then there were other countries like Taiwan, for example, Vietnam, that still did well because guess what? You know, a lot of what we're seeing happening in America when it comes to growth in investment in particular and capital expenditure is to do with AI. And they did very well at exporting related goods there. And then there's a third group which is the likes of Europe, which haven't done that well because they have seen trade with America suffer and haven't got the alternative streams at the moment. You know, when you look at growth in 2026, I think it's fair to say it's going to be another wobbly one for global trade.
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B
Dashini, David and Michelle Fleury, thanks so much for joining us on Marketplace. Well, as you heard from Dashini and Michelle, one aspect that has helped some countries stay on an even keel despite facing steep U.S. tariffs has been their investment and advancement in artificial intelligence. Let's look into the money behind it with the BBC's technology editor, Zoe Kleiman and our North America technology correspondent, Lily Jamali. Zoe, there's been a lot of money poured into AI and increasing Concerns as a result that there could be a market bubble. Where are we with that?
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E
We are so often talking about these eye watering sums of money that are pouring into these AI companies. I mean, it is astonishing. And let's bear in mind, you know, we're still in a kind of speculative space here. I mean, a lot of this technology is in development. You very soon start to think, well, this isn't sustainable, is it? And everyone I talk to says that what they do say is in 20 years time, almost all experts predict that the world's most powerful and wealthy companies will probably be AI companies.
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F
One thing I hear all the time is that the dot com bubble will look like a walk in the park if this bubble is in fact a bubble and if it bursts because there's so much more money on the line. Now, just look at OpenAI, the one that sort of brought AI into the mainstream. With ChatGPT, they have entered into massive deals with Nvidia, with AMD and Broadcom, which are some of the major chip designers and chip makers. They have these deals with Oracle. They're building tons of data centers and it's all about more chips, more data centers, more power. And this is a company OpenAI is, that is now valued at around a half a trillion dollars. That's the most valuable private company out there. You might think, oh, it's just the people that invested in OpenAI, I as a regular person, can't do that. Well, because there's all these publicly traded companies that are now in league with OpenAI. There's a lot of mom and pop investors who may be affected by this.
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B
So Lily, what's changing in how developers are actually adapting AI?
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F
One trend that I am hearing a lot about here in Silicon Valley lately is that increasingly companies, despite all the bells and whistles with these fancy new agentic AI products, these companies are increasingly turning to Chinese AI technology, which is open source in many cases, unlike what you might see from ChatGPT or Anthropic. ChatGPT, we should say, has recently put out an open source model, but only after a couple of years and probably because they saw what China was doing. You hear people like Brian Chesky over at Airbnb talk about this. There's so many other major companies that are using these Chinese large language models because they are really cheap, about a tenth of the cost of using something, you know, comparable from OpenAI. And they're also, in some cases they say better, they're easier to work with, they're much more customizable to the needs of these companies.
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B
Zoe Kleinman and Lily Jamali, great to speak to you. Thanks for joining us on Marketplace. And that's it for the Marketplace Morning Report. From the BBC World Service, I'm Will Bain wishing you a very happy new Year. Thanks for listening.
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G
Hey everyone, you already listened to Marketplace Podcasts, so you know that it's important to understand how economic forces shape our lives. And that feels especially important now as we're all trying to make sense of the latest headlines. I'm Maria Reyes, host of Marketplaces. This is Uncomfortable, a show that explores how money bumps up against our relationships, our choices, and the parts of life we don't always say aloud. And starting January 15th, we are back every single week. New stories, new questions, and the kind of conversations that make you feel less alone in this quickly changing economy. We're tackling questions like should I turn my hobby into a money making side hustle? How do I deal with layoff anxiety? Or what do we owe our parents financially? Don't miss an episode. Subscribe to this is Uncomfortable from Marketplace. Wherever you get your podcasts.