Business Bites Global trade remains resilient amid tariffs and geopolitical shocks

Tariffs are rising. Geopolitical tensions remain high. Conflicts are disrupting important trade routes. You might expect global trade to slow down. It hasn't .

The latest DHL Globalization Tracker, released by DHL and New York University's Stern School of Business, shows that 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. And the picture extends beyond trade: the Tracker measures globalization across international flows of trade, capital, information and people. Taken together, these flows reached a record globalization level of 25.8% in 2025.

One major driver is the global race to build infrastructure for artificial intelligence.

Strong demand for goods used to build AI infrastructure, such as semiconductors and data-transmission equipment, drove 42% of goods trade growth in 2025. This share rose to 76% during the first quarter of 2026, according to World Trade Organization (WTO) and Organisation for Economic Co-operation and Development (OECD) data.

At the same time, global trade continues to face significant headwinds. The Iran war and closure of the Strait of Hormuz disrupted important trade routes, with particularly severe effects on economies dependent on the Strait. Trade policy created a separate challenge, with U.S. tariffs reaching their highest levels in decades.

But the global effects have remained concentrated. Most countries refrained from broad retaliation against U.S. tariffs, while many increased efforts to secure access to alternative markets through new trade agreements.

The resilience of global trade is also reflected in the outlook.

Global goods trade is projected to expand by an average of 3.4% per year through 2029 - substantially faster than the 2.7% rate recorded over the previous decade. Current forecasts are also stronger than those made before the recent U.S. tariff increases and the Iran war.

"The surprise is not only that global trade kept growing through new tariffs and the Iran war. The outlook is now stronger than it was before either shock. This reminds us to look beyond the most visible disruptions and recognize the deeper reasons why trade remains so resilient," said Prof. Steven A. Altman, Director of the DHL Initiative on Globalization at NYU Stern's Center for the Future of Management.

"The AI trade boom highlights the demand for goods and services that can only be provided efficiently when specialized producers work together across countries. It also shows how companies continually adapt to keep trade moving through disruptions and policy shifts."

Geopolitical shifts are reshaping some international relationships, but the Tracker finds that these changes remain concentrated rather than global. U.S.-China ties have weakened sharply, for example, while close U.S. allies have largely maintained their relationships with China.

For businesses, the findings point to the importance of preparing for disruptions without giving up the advantages of international engagement. While specific economies, industries or trade routes can still face significant risks, overall global flows remain strong.

Decisions such as relocating production should therefore balance supply-chain resilience with the benefits of global reach and market access. Companies that pull back from international markets while competitors remain globally active may risk weakening their competitive position.

The latest data show that globalization is not in broad retreat. Global trade remains strong even as its underlying patterns change - highlighting the importance of preparing for disruptions while preserving the benefits of global reach and market access.