Globalization has reached a new record despite higher tariffs, geopolitical conflicts and continued uncertainty. This is one of the key findings of the latest edition of the DHL Globalization Tracker, commissioned by DHL and authored by researchers from New York University’s Stern School of Business.
Based on more than 30 million data points, the Tracker analyzes international flows of trade, capital, information and people, providing an extensive, a data-driven view of globalization and global trade trends.
For Canadian businesses, the findings also highlight important changes closer to home. North America recorded the largest upgrade to its trade-growth forecast since January 2026, even as trade between the U.S. and Canada declined during the first five months of the year. The combination of changing U.S. tariff policy, shifting sourcing patterns and resilient global trade makes the latest Tracker particularly relevant for businesses operating across the Canada–U.S. trade lane.
Global trade remains resilient as U.S. tariffs reshape the landscape
The global race to build infrastructure for artificial intelligence is giving world trade strong momentum at a time of higher tariffs and geopolitical conflicts. Global goods trade grew faster in the first half of 2026 than in any half-year in the past 15 years, apart from the exceptional Covid rebound. A major driver was strong demand for goods used to build AI infrastructure, such as semiconductors and data-transmission equipment. Trade in AI-enabling goods drove 42% of goods trade growth in 2025, rising to 76% during the first quarter of 2026.
At the same time, the Iran war and the closure of the Strait of Hormuz disrupted important trade routes, although their overall effects on global trade remained concentrated. U.S. tariffs on global trade also reached their highest levels in decades, but their global impact was limited. The U.S. accounted for only 13% of world imports in recent years, and roughly half of U.S. imports were exempt from the tariff increases as of August 2026. Most countries also refrained from broad retaliation, with many instead seeking access to alternative markets through new trade agreements.
For Canada, developments in U.S. trade policy are especially relevant to the North American picture captured by the Tracker. Forecasts for North America saw the largest upgrade of any region since January 2026, reversing much of the sharp downgrade that followed U.S. tariff increases in 2025. The Tracker attributes part of this improvement to the large-scale AI buildout in the U.S., which has fueled U.S. import growth even as imports of other goods declined.
The global trade outlook has improved. Global goods trade is projected to grow by an average of 3.4% per year through 2029, compared with 2.7% annual growth over the previous decade. East Asia and the Pacific recorded the strongest trade growth, with the value of its trade rising 24% in the first five months of 2026 compared with the same period in 2025. Europe followed with 12% growth and Sub-Saharan Africa with 11%.
The improved outlook does not mean tariff-related uncertainty has disappeared. The Tracker identifies trade policy as an ongoing risk, noting that the U.S. continues to adjust its tariffs. For Canadian businesses trading across the border or participating in wider global supply chains, the data point to an environment where trade remains resilient while the routes, sourcing patterns and policies shaping that trade continue to change.
U.S.–Canada trade shifts as North America looks farther afield
One of the Tracker’s most directly relevant findings for Canada comes from its analysis of regionalization. While global trade showed new signs of becoming more regional in 2025 and early 2026, North America moved in the opposite direction.
During the first five months of 2026, North America’s average trade distance increased by 140 kilometres while its intra-regional trade share remained stable. Most notably for Canadian businesses, trade between the U.S. and Canada declined, while U.S. trade increased with more distant partners including Taiwan (China), Vietnam and Korea. The U.S. itself recorded a 114-kilometre increase in average trade distance.
That provides an important counterpoint to expectations that geopolitical uncertainty, tariffs and interest in nearshoring would automatically push more business toward neighbouring markets. The Tracker finds that there is still limited evidence of a broad shift toward more regionalized international flows, with North America's latest trade patterns illustrating how differently regional dynamics can evolve.
Canada remains connected to the global trading system
Beyond trade, the DHL Globalization Tracker measures the broader development of globalization through international flows of trade, capital, information and people. In 2025, globalization reached a record level of 25.8%, with international flows growing faster than domestic activity across all four categories.
The geopolitical picture is also more nuanced than a simple division of the world into competing blocs. The Tracker specifically includes Canada among the U.S. “close allies” in its analysis and finds that this group has largely maintained ties with China. On average, the share of U.S. close allies’ flows involving China is down only 4% since 2016, while China’s flows involving U.S. close allies are down 7%.
For Canadian businesses, that finding reinforces the broader message of the Tracker: major bilateral relationships are changing, but international business has not broadly retreated. Instead, globalization is being selectively reshaped, with different markets, trade lanes and supply chains responding differently to tariffs and geopolitical pressures.
8 key takeaways
The DHL Globalization Tracker can help businesses better understand global trade developments and explore trends by region and country. DHL Express can support businesses looking to turn international opportunities into growth.
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