Globalization remains at a historically high level – despite escalating geopolitical tensions, rising U.S. tariffs, and unprecedented uncertainty about future trade policies. This is one of the key findings of the new DHL Global Connectedness Report 2026, released by DHL and New York University’s Stern School of Business.
Based on more than 9 million data points tracking international flows of trade, capital, information, and people, the report offers the most comprehensive view of globalization available – making it an essential resource for any business with cross-border trade ambitions.
Global Trade in 2026: Holding Firm in an Era of Uncertainty
Despite a volatile 2025 shaped by tariff hikes, geopolitical friction, and ongoing uncertainty around global supply chains, international trade proved more resilient than many expected. The DHL Global Connectedness Report 2026 shows that the world’s level of globalization held steady at 25% last year – matching the record high first reached in 2022. In other words, cross-border flows of goods, capital, information, and people have not retreated. Businesses may be adapting, but they are not pulling back from global markets.
Trade performance in 2025 was particularly striking. Global goods trade grew faster than in any year since 2017 (excluding the pandemic rebound). Early in the year, U.S. importers accelerated shipments ahead of new tariff increases. At the same time, China redirected exports toward non-U.S. markets, sustaining overall global volumes. Meanwhile, surging investment in AI infrastructure drove significant increases in trade for semiconductors, data transmission equipment, and other AI-related products – which, according to WTO estimates, accounted for 42% of goods trade growth in the first three quarters of the year.
Looking ahead, higher tariffs are expected to modestly slow – but not reverse – trade expansion. Global goods trade is projected to grow at an average annual rate of 2.6% through 2029, in line with the past decade. Crucially, most global trade flows do not involve the United States, and many countries are actively diversifying partnerships and negotiating new trade agreements. The result is a global trading system that is continuing to stretch across longer distances and connect markets worldwide.
All of which means that the outlook for cross-border business remains positive. Global trade is not retreating – it is reconfiguring. Companies that understand where flows are strengthening and which markets are deepening ties will be well positioned to capture new growth.
Key Takeaways from the DHL Global Connectedness Report 2026
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Global connectedness remains stable. The DHL Global Connectedness Index does not indicate a shift from international to domestic activity across trade, capital, information, and people flows. Global connectedness reached a record high in 2022 and has not changed appreciably through 2025.
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Goods trade grew faster in 2025 than in any year since 2017, excluding the volatile Covid-19 pandemic period. U.S. buyers rushed to import goods ahead of tariff hikes, China increased exports to non-U.S. destinations, and investment in Al infrastructure boosted trade in goods such as semiconductors and data transmission equipment.
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Trade growth is forecast to continue over the 2026-29 period at the same average pace as during the past decade. U.S. tariff increases only modestly reduced forecast global trade growth. Other countries supported trade growth by not raising tariffs, and many negotiated new trade deals to secure access to alternative markets.
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U.S.- China ties continue to diminish. Since 2016, the share of U.S. trade, capital, information, and people flows with China has dropped 42%, while China's share with the U.S. is down 37%. However, close allies of the U.S. and China (excluding Russia) show no similar pattern of decoupling from geopolitical rivals.
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The share of U.S. imports coming directly from China has fallen from a peak of 22% in 2017 to 13% in 2024, before plummeting further to only 9% during the first three quarters of 2025. Nonetheless, analysis considering Chinese inputs in goods imported from other countries does not show a clear declining trend in U.S. reliance on content from China.
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The world remains far from a split into disconnected geopolitical blocs. Only 4-6% of global goods trade, greenfield FDI, and cross-border M&A have shifted away from geopolitical rivals over the past decade. Trade flows shifted more toward neutral countries than to close allies, implying more 'de-risking' than 'friendshoring'.
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Most international business already occurs among friendly countries, limiting the threat de-risking strategies pose to globalisation. In 2025, only 12% of global goods trade, 5% of greenfield FDI, and 3% of cross-border M&A took place between U.S.-aligned and China-aligned blocs of close allies.
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Goods trade and greenfield FDI crossed their longest average distances on record in 2025, while the shares of these flows occurring within major geographic regions fell to new lows. It remains to be seen whether nearshoring strategies will ultimately lead to more regionalized business patterns.
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Singapore is the world's most globally connected country, followed by Luxembourg and the Netherlands. Singapore has the largest international flows relative to domestic activity, and the United Kingdom has the most broadly distributed flows around the world. The United Arab Emirates achieved the largest increase in global connectedness since 2001.
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Prominent narratives about deglobalization are driven more by politics and public policy than by actual shifts in cross-border flows. While the risk of deglobalization has risen and the pattern of connectedness is shifting, the world overall remains as connected as ever.
Discover where global trade is heading next.
Visit the DHL Global Connectedness Report hub
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