Global trade defies US tariffs and is projected to keep growing

Global trade is holding strong - even as US tariffs hit highs not seen since the 1930s, as per a special update to the DHL Global Connectedness Tracker released by DHL and New York University’s Stern School of Business, offering the first systematic assessment of how international trade and business investment are reacting to shifting US trade policy under President Trump’s second term. This edition draws on over 20 million data points from more than 25 sources to provide a comprehensive overview of the changing landscape of globalisation and global trade.

Global trade on track to match growth rate of previous decade through 2029

Global trade is projected to keep growing. The Tracker’s composite forecast projects a 2.5% annualised growth rate in global trade volumes from 2025 to 2029 - roughly matching the pace of the previous decade. One reason why trade can continue growing even as the US raises tariffs is that only 13% of global goods imports went to the U.S. in 2024 and 9% of exports came from the US. Another is that most countries have not followed the US in implementing broad tariff increases.

Tariffs are slowing, not stopping trade growth

While US tariffs are predicted to slow global trade growth, they are not expected to stop it. Before the current wave of tariff increases (in January 2025), global goods trade volume was forecast to grow at a 3.1% annualised rate over the 2025 to 2029 period - since downgraded to 2.5%. North America experienced the steepest downgrade, with projections falling from 2.7% in January 2025 to just 1.5% by September. Most other regions experienced smaller downward revisions.

In contrast, forecasts were upgraded for South & Central America and the Caribbean, as well as the Middle East & North Africa. Most countries in these regions face relatively small US tariff increases, and Middle East trade is expected to benefit from increased oil production and exports.

Global trade defies tariff turbulence in first half of 2025

The Tracker also reveals that, in the first half of 2025, international trade grew faster than in any half-year since 2010, excluding the pandemic rebound. US imports surged early in 2025 as buyers rushed to frontload purchases ahead of tariff hikes. China fully offset declining exports to the US with increased shipments to the ASEAN, while also substantially growing its exports to Africa, the EU and other markets. Even after the frontloading wave in the US subsided, global trade volumes remained above prior-year levels. 

Business decision makers continue betting on foreign markets 

Data on international corporate investment during the first half of 2025 were mixed, but they underscore the general resilience of global business. There was no pattern of companies redirecting investment from foreign to domestic markets. The cross-border share of M&A deals, for example, remained largely unchanged. However, uncertainty did appear to deter some cross-border investment, especially smaller transactions and new investments during the second quarter of 2025. 

No major split between geopolitical blocks 

Despite 2024 marking the highest number of active global conflicts since World War II, the Tracker shows no major split of the world economy between rival geopolitical blocs. While direct US-China ties continue to weaken and Russia is largely disconnected from Western-aligned economies, the world as a whole has not substantially reoriented its business ties along geopolitical lines - at least not yet. 

Trade is not becoming more regional  

Moreover, contrary to popular belief, the DHL Tracker indicates that trade is not becoming more regional. In fact, the average distance that traded goods travelled rose to a new record of about 5,000 km during the first half of 2025. The share of trade within major world regions fell to a record low of 51%. Greenfield foreign direct investment also became less regional, while international M&A activity remained at a stable level of regionalisation.

Globalisation holds at record high levels

The report also measures the wider phenomenon of globalisation based on trade, capital, information and people flows. It uses a scale running from 0% (no flows across national borders) to 100% (borders and distance have no impacts). Currently, the global level stands at 25% - nearly unchanged since its record high in 2022.

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