Global Trade

The tariff test: How global trade is adapting in 2025

Even as tariffs rise to their highest levels in decades, global trade isn’t shrinking down – it’s adapting. Here’s what the 2025 Special Update of the DHL Global Connectedness Tracker tells us.

The 2025 Special Update of the DHL Global Connectedness Tracker is out – and it’s pretty revealing. Developed with NYU Stern, it shows just how trade and investment are responding to shifting US trade policy. Drawing on over 20 million data points from more than 25 sources, the report indicates that despite tariff headwinds, globalization remains resilient and continues to evolve.

Trade keeps moving – just not the way you’d think

In the first half of 2025, international trade grew faster than in any comparable half-year since 2010 (excluding the pandemic rebound). Forecasts point to annualized growth of 2.5% through 2029, roughly matching the pace of the previous decade.

While higher US tariffs are expected to slow overall growth, regions such as South & Central America and the Middle East & North Africa continue to show strong momentum. Both have seen their trade forecasts upgraded, driven by steady demand and strong commodity exports. Meanwhile, China is offsetting reduced US exports by strengthening ties with ASEAN, Africa, and Europe.

At the same time, average trade distances have reached a record 5,000 kilometers – proof that globalization is expanding its reach, not retreating.

Business as usual – but smarter

Despite rising geopolitical tensions, the data show that businesses continue to bet on global markets. The share of cross-border M&A activity remains steady, and there’s no widespread shift toward domestic investment. In other words, companies are still looking outward.

The latest data show companies managing the risks and opportunities of a connected world rather than retreating to within countries or regions.

Prof. Steven A. Altman, Director of the DHL Initiative on Globalization at NYU Stern

The Tracker finds no evidence of a major split in the global economy. While US–China ties continue to weaken and Russia remains isolated from Western-aligned economies, the wider world has not fractured into rival blocs. In fact, most global trade still occurs between politically friendly or neutral nations.

All roads lead to global trade

Contrary to popular belief, trade is not becoming more regional. In addition to the record average trade distances, the share of trade within major world regions has fallen to a record low of 51% and greenfield investment is also less regionalized – further evidence that globalization’s core structures remain intact.

Overall, the level of global connectedness – measured across trade, capital, information, and people flows – stands at 25%, nearly unchanged since its record high in 2022.

Despite all the headwinds, the DHL Global Connectedness Tracker highlights the enduring strength of global trade. We must never underestimate the creativity of buyers and sellers around the world who want to do business with each other.

John Pearson, CEO of DHL Express

About the DHL Global Connectedness Tracker

The DHL Global Connectedness Tracker gives business leaders a clear, data-backed view of how the world economy is moving – across borders, regions, and industries. Authored by Prof. Steven A. Altman and Caroline R. Bastian of NYU Stern, the Tracker complements the long-running DHL Global Connectedness Report and features interactive charts that let users explore trends by region or geopolitical alignment.

Explore the data

Is global trade passing the tariff test? The short answer is yes, but the fascinating part is how it is responding to the tornado-like twists of US trade policy today. Far from retreating, the global economy is evolving, adapting, and expanding in new ways. Explore the full 2025 Special Edition of the DHL Global Connectedness Tracker for all the insights and use interactive tools to dive deeper into the flows and regions you're most interested in.