DHL-Globalization-Tracker-October-2026

1 In partnership with DHL Globalization Tracker October 2026 Steven A. Altman Caroline R. Bastian NYU Stern School of Business ⬩ Center for the Future of Management ⬩ DHL Initiative on Globalization Contents Key takeaways .............................................................................................................................................................................................................................................. 2 Question 1: Is global goods trade slowing amid policy shocks and conflict-related disruptions? ................................................................................................ 3 Trade Growth by Region, Country, and Trade Lane........................................................................................................................................................................... 5 Question 2: Is globalization reversing via shifts from international to domestic activity?.............................................................................................................. 8 Question 3: How is geopolitical rivalry reshaping international business patterns? .....................................................................................................................10 Diversification Across Partner Countries ........................................................................................................................................................................................... 16 Question 4: Are international flows becoming more regional? .........................................................................................................................................................16 Conclusion ................................................................................................................................................................................................................................................... 19 Summary Profiles of Flows by Geopolitical Alignment...................................................................................................................................................................20 Country Flow Share Shifts.................................................................................................................................................................................................................... 21 The DHL Globalization Tracker (formerly “DHL Global Connectedness Tracker”) aims to provide the most timely and comprehensive available resource for tracking global flows of trade, capital, information, and people. The online version features interactive charts with country- and region-level analysis, helping readers spot patterns relevant to their own countries and companies. The data updates for this edition were completed in September 2026 and cover developments up to mid-2026 for goods trade, greenfield foreign direct investment (FDI), and mergers & acquisitions (M&A) activity, as well as 2025 full-year results for most other types of international flows. This edition of the Tracker focuses on four key questions: (1) Is global goods trade slowing amid policy shocks and conflict-related disruptions? (2) Is globalization reversing via shifts from international to domestic activity? (3) How is geopolitical rivalry reshaping international business patterns? (4) Are international flows becoming more regional? The latest results show globalization reaching a new high and trade growth accelerating, while major shifts in business patterns remain concentrated rather than global.DHL Globalization Tracker October 2026 2 Key takeaways 1. Globalization reaches a new high. International trade, capital, information, and people flows grew faster than domestic activity in 2025, lifting the DHL Global Connectedness Index to a record high. 2. Goods trade growth accelerates despite major shocks. Global goods trade grew faster in H1 2026 than in any half-year since 2011, excluding the exceptional Covid rebound. 3. Trade forecasts are stronger than before recent shocks. Current forecasts call for faster trade growth through 2029 than forecasts made before the recent U.S. tariff increases or the Iran war—and faster than actual growth over the past decade. 4. AI investment is boosting international flows, helping offset the effects of U.S. tariff increases and conflictrelated trade disruptions. 5. Major geopolitical shifts remain concentrated. Global business patterns have changed modestly, while countries at the center of geopolitical competition and policy shocks have experienced much larger shifts. 6. U.S.–China decoupling is dramatic, but affects a small share of global flows. These two economies have nearly halved the shares of their flows with each other over the past decade, but less than 2% of global goods trade and 1% of greenfield FDI and cross-border M&A are between these geopolitical rivals. 7. U.S. allies are not decoupling from China. Their ties with China have changed little since 2016, challenging the notion that the world is splitting into separate U.S.- and China-aligned economic blocs. 8. Trade regionalization ticks up, driven by Asia. Intra-regional trade increased in early 2026, driven by trade within East Asia, but investment flows do not show a comparable shift toward regionalization.DHL Globalization Tracker October 2026 dhl.com/globalization 3 Question 1: Is global goods trade slowing amid policy shocks and conflict-related disruptions? In a word: no. Global trade growth accelerated through mid-2026 despite rising geopolitical tensions and active conflicts. The AI boom has provided a major boost, with surging trade in semiconductors and other AI-related goods helping offset these headwinds. Current forecasts call for strong trade growth to continue through 2029—at a faster pace than forecast before the 2025–26 U.S. tariff increases and the Iran war. Growth is also forecast to outpace the actual rate recorded over the past decade. Trade Growth Accelerates Global goods trade grew faster during the first half of 2026 than during any half-year since 2011, apart from the exceptional rebound after trade declined during the Covid-19 pandemic (see Figure 1). This acceleration came despite disruptions from the closure of the Strait of Hormuz and shifts in U.S. tariff policies. It is all the more striking because trade was already growing rapidly: in 2025, it expanded at its fastest pace since 2017, again excluding the pandemic rebound. Figure 1: Year-on-Year Goods Trade Volume Growth Data Source: CPB World Trade Monitor Note: Based on half-year averages of seasonally adjusted monthly trade volumes AI Boosts Trade Growth The race to build artificial intelligence (AI) infrastructure has become a major driver of trade growth. AI-enabling goods accounted for 42% of all goods trade growth in 2025, and this share rose to about 76% during the first quarter of 2026, according to WTO and OECD research. The value of global trade in these goods—including semiconductors and data transmission equipment—grew 22% in 2025 and accelerated to 42% year-on-year in the first quarter of 2026. Trade in critical minerals, batteries, and electric vehicles also expanded rapidly during the first quarter of 2026. Trade Volumes Rise Despite Disruptions Trade volume trends by region/country (Figure 2) highlight how global growth has persisted in the face of substantial turbulence. The Middle East and Africa region’s trade volumes fell sharply after the Iran war began in late February 2026. U.S. imports fell below prior-year levels in late 2025 after surging earlier in the year when buyers raced to get ahead of tariff increases. Yet DHL Globalization Tracker October 2026 4 these disruptions did not derail global trade growth. And China—the world’s largest exporter— grew its exports even faster than the global average, despite a sharp decline in its exports to the U.S. China’s export growth supported global trade growth but fueled concern about heightened competition in China’s other export markets. Figure 2: Monthly Goods Trade Volume (vs. 2024 level) Data Source: CPB World Trade Monitor Note: China values in early 2026 are shown in hashed lines, because a shift in the timing of the Lunar New Year holiday may have affected the seasonality adjustment for these values, so they should be used with caution. Trade Growth Tug-of-War Global trade is being pulled in opposing directions—and so far, the positive factors for trade growth have outweighed the negatives. The AI boom is firmly on the positive side: production of AI-related goods relies heavily on global value chains, boosting trade in raw materials and components, as well as final goods. Conflict-related disruptions pull in the other direction. Their trade effects have been severe, but concentrated, particularly in economies dependent on the Strait of Hormuz and in products such as oil/gas and fertilizers. Trade policy is another negative force. Restrictions have increased rapidly and U.S. tariffs have reached their highest levels in decades. But here, too, the global impact is more limited than the dramatic nature of the policy changes might suggest. The U.S. share of world imports was only 13% in 2025, and roughly half of U.S. imports were exempted from tariff increases as of August 2026. Globally, 72% of goods trade is still conducted on most-favored-nation (MFN) terms (down from 80% in 2022).1 This interplay of opposing forces is also highlighted by new OECD research showing that the share of foreign content in the exports of major economies increased from 2019 to 2024, despite shifts toward more domestic sourcing of inputs. The reasons for this surprising result are shifts in the mix of exported goods and services and changes in the production technologies employed. This underscores how economic and technological shifts can increase trade even as companies aim to boost sourcing from domestic suppliers. 1 Most recent (72%) reflects tariff actions through February 2026 and trade patterns as of 2024, based on WTO analysis. Intra-EU trade is excluded. This analysis also indicates 16% of goods trade is conducted under preferential trade agreements, and 11% has been affected by recent tariff actions.DHL Globalization Tracker October 2026 dhl.com/globalization 5 Trade Growth by Region, Country, and Trade Lane Trade growth varied widely in the first five months of 2026, depending on where—and at what level—you look. Figure 3 breaks down the latest trade growth data by region, country, and individual trade lane (country pair).2 At the regional level, East Asia & Pacific recorded the strongest trade growth, with trade value (in current U.S. dollars) up 24% from the same period in 2025. Europe and Sub-Saharan Africa followed, with growth of 12% and 11%, respectively. At the country level, a look at the 50 largest trading nations—which together account for 92% of global trade—shows that Uzbekistan saw the fastest trade value growth, up 122%. Uzbekistan’s goods trade boom reflects industrial growth supported by economic reforms, as well as wider regional developments. The next largest increases were in Malaysia (51%) and Taiwan, China (44%), both benefiting from electronics demand boosted by AI investment. The only countries with declining trade values (among the 50 largest) were Saudi Arabia (–37%), Ireland (–16%), and United Arab Emirates (–7%). Saudi Arabia and the UAE were both affected by the closure of the Strait of Hormuz, while Ireland’s trade declined back to a more normal level after spiking in early 2025 due to frontloading of pharmaceutical exports to the U.S. At the trade-lane level, a look at the world’s 100 largest trade lanes—which together account for more than 40% of global trade—shows that the fastest growth was in exports from Switzerland to the United Kingdom (+292%). Exports from Switzerland to China (+212%) followed, then exports from the United Arab Emirates to Switzerland (+175%). The steepest declines were in exports from Ireland to the United States (–67%), from Switzerland to the United States (–56%), and from India to the United States (–11%). These trade lane developments were all influenced by U.S. tariffs and related uncertainty, with gold trade swings playing an especially prominent role for Switzerland. Figure 3: Goods Trade Value Top Increases and Decreases (2026 vs. 2025) Year to Date Data Sources: IMF International Trade in Goods (IMTS); CPT Single Window, United States Census Bureau Note: Based on comparison of January to May 2026 versus the same period in 2025 2 Figure 3 uses changes in trade value (measured in current U.S. dollars) rather than trade volume because more complete recent country-level data are available for trade value.DHL Globalization Tracker October 2026 6 Trade Outlook Stronger Than Before Recent Shocks Despite the recent shocks to the international trade environment, the outlook for trade has actually improved. Strikingly, all four of the forecast sources we use to generate composite trade forecasts now call for faster trade growth through 2029 than they did before either the recent U.S. tariff increases or the 2026 Iran war.3 Figure 4 compares the current outlook with forecasts compiled in January 2025, before the U.S. tariff increases, and January 2026, before the Iran war. Figure 4: Annual Goods Trade Growth Data Sources: Economist Intelligence Unit; IMF World Economic Outlook; Oxford Economics Global Data; S&P Global Market Intelligence The present outlook reflects a series of forecast upgrades since mid-2025. After the U.S. announced ‘Liberation Day’ tariffs in April 2025, trade forecasts were cut dramatically, with some sources predicting that global trade volumes would begin shrinking. The downgrades largely reflected fears that other countries would retaliate against U.S. tariffs, triggering a global trade war. Instead, most countries refrained from retaliation and many accelerated efforts to secure access to alternative markets through new trade agreements. Combined with the AI boom, this helped drive the subsequent trade forecast upgrades. Trade Growth to Outpace Past Decade Global trade volumes are forecast to grow at an annualized rate of 3.4% from 2026 to 2029, substantially faster than the 2.7% rate recorded over the prior decade (2016–25). However, trade growth is expected to slow from an unusually rapid 5.3% in 2025 to 4.6% in 2026 and 3.6% in 2027. Middle East Leads Trade Forecasts, North America Leads Upgrades The fastest trade growth over the 2026–29 period is forecast in the Middle East & North Africa region, followed by South & Central Asia and East Asia & Pacific (see Figure 5). The Middle East & 3 Composite forecast drawn from IMF World Economic Outlook, Economist Intelligence Unit, Oxford Economics, and S&P Global Market Intelligence, following methodology employed in Steven A. Altman and Caroline R. Bastian, DHL Trade Atlas 2025, DHL Group, 2025.DHL Globalization Tracker October 2026 dhl.com/globalization 7 North Africa forecast is especially uncertain, due to the ongoing conflict in this region. The optimistic outlook for this region reflects expectations for a strong recovery after the eventual cessation of hostilities. The current forecast predicts a -4% decline in this region’s trade volume in 2026 followed by a 12% increase in 2027. The largest upgrade to the trade growth forecasts since January 2026 was in North America, reversing much of the sharp downgrade that followed U.S. tariff increases in 2025. The largescale AI buildout in the U.S. has fueled U.S. import growth, while imports of other goods have declined. One study estimates that without the AI investment boom, U.S. imports would have declined 10% in 2025 rather than increasing modestly. The second-largest upgrade was in East Asia & Pacific, supported by that region’s leading role in producing AI-enabling hardware. Figure 5: Goods Trade Growth Forecast 2026–29 CAGR, September 2026 vs. January 2026 Versions Data Source: DHL Trade Atlas composite forecast based on IMF World Economic Outlook, Economist Intelligence Unit, Oxford Economics Global Data, S&P Global Market Intelligence Digital Services Outpacing Overall Trade Growth Trade in services is growing even faster than trade in physical goods, and AI is expected to continue providing an especially powerful boost to services trade. The fastest growth is in digitally delivered services (via online platforms, apps, etc.), which grew 10% in 2025 and now accounts for 55% of total services trade. WTO research predicts that AI could boost trade in digitally delivered services by 42% by 2040, exceeding the overall 34–37% boost predicted across goods and services trade. Trade Outlook Still Faces Risks The AI boom has been a major driver of recent trade growth, but that strength also creates a vulnerability. The concentration of trade growth in AI-related goods means that any slowdown or reversal in this sector could substantially reduce trade growth. Further escalation of military conflicts could also weaken the outlook, particularly if key trade routes or major trading economies are affected. Trade policy also remains unusually volatile. New trade barriers are a particular risk, as the U.S. continues to adjust its tariffs and other countries respond to increased imports from China.DHL Globalization Tracker October 2026 8 Question 2: Is globalization reversing via shifts from international to domestic activity? Global trade is growing rapidly in absolute terms. But to assess whether globalization itself is advancing or receding, we also need to look at international activity in relative terms. The latest data show that the international share is growing. Globalization Depth Reaches New Record The depth dimension of the DHL Global Connectedness Index measures international relative to domestic activity globally across 13 types of trade, capital, information, and people flows (see Figure 6). It reached a new record high of 25.8% in 2025,4 with the growth of international flows outpacing the growth of domestic activity across all four categories. Capital and information flows recorded the largest increases in international relative to domestic activity in 2025. Trade recorded the smallest increase in depth—even though, as the previous section showed, trade itself showed robust absolute growth. Figure 6: DHL Global Connectedness Index Depth Trends Data Source: DHL Global Connectedness Index Note: Scaled from 0% (no flows cross national borders) to 100% (no border or distance effects) One Quarter Globalized The new record of 25.8% strongly challenges the notion that globalization has gone into reverse. But it also highlights how limited globalization remains. We measure the depth of global connectedness on a scale from 0%—where no flows cross national borders—to 100%, where 4 The DHL Global Connectedness Report 2026 projected stable rather than rising overall depth in 2025 based on data and forecasts available as of January 2026. Subsequent data releases showed, in particular, stronger FDI results (across both FDI flows and announced greenfield FDI), leading to higher-than-projected depth (overall and especially for the capital pillar) in 2025.DHL Globalization Tracker October 2026 dhl.com/globalization 9 borders and distance cease to matter and no longer affect flows.5 At roughly 25%, the world remains far closer to a collection of separate national economies than to full global integration— even after decades of globalization. Globalization also varies widely across flow categories: information flows are the most globalized, followed by capital and trade, while people flows remain the least globalized. Companies Show No Retreat from Foreign Markets Figure 7 reinforces this broader picture of resilience, showing international versus domestic activity across a variety of specific flows. About 20% of the value of all goods and services produced worldwide in 2025 was traded internationally, up slightly from 2024 and just below the record high of 22% set in 2008 (nearly matched again in 2022).6 Economic integration via trade thus remains close to record levels, even though roughly 80% of economic activity is still domestic. International investment also remained resilient. Foreign direct investment (FDI) flows increased as a share of global fixed investment in 2025, while the value of announced greenfield FDI projects also rose slightly relative to world GDP. Large projects drove this resilience even as the number of greenfield FDI projects declined. AI investment played a major role: 40% of the value of greenfield FDI projects in 2025 was in the ICT/electronics sector. The share of M&A transactions crossing national borders has fallen modestly since spiking in 2022, but remains in line with historical norms. Figure 7: Individual Flow Depth Trends Data Sources: Asian Development Bank Multiregional Input-Output Database; Clarivate Web of Science; Financial Times fDi Markets; Oxford Economics Global Travel Service; SDC Platinum; UNCTAD FDI/MNE database; World Bank World Development Indicators Notes: Exports (Value Added) measures the share of value that ends up in a different country from where it was produced (regardless of how many borders crossed in multi-country value chains). Aggregated from reported flows. 5 For a brief explanation of this scaling method and selected references, see Endnote 1 on p. 101 of the DHL Global Connectedness Report 2026. Additional details are provided in Section 8 of the same report. 6 We measure this using the ratio of trade in value added to world GDP, counting the value of traded goods only once regardless of how many borders they may cross in multi-country supply chains. Recent trends through 2024 were calculated based on data from the Asian Development Bank’s Multiregional Input-Output Tables at current prices (62-country version), and the 2025 projections are based on gross trade and GDP growth.DHL Globalization Tracker October 2026 10 Payments for the use of foreign intellectual property also continued to rise as a share of world GDP. Taken together, these trends show no retreat from any of the three main ways companies serve foreign markets: exporting (trade), investing in local operations (FDI), and licensing intellectual property to local partners. Other measures published in the DHL Global Connectedness Report 2026 reinforce this picture. The report shows that multinational firms continue to earn near-record shares of their sales abroad and generate close to the highest recorded shares of global value-added, employment, and trade. Measures of international production via global value chains also remain resilient. Travel Recovers as Scientific Collaboration Declines Trends beyond business flows are more mixed. As seen in Figure 7, international scientific collaboration has declined since 2020 (measured based on the share of publications co-authored by researchers in multiple countries). But this does not reflect a broad retreat from cross-border research. The decline has instead been driven by growth in domestic scientific publications in China. Excluding China, the share of internationally coauthored scientific publications continues to rise. International travel, meanwhile, continued its gradual recovery from the Covid-19 pandemic. The number of international trips per capita finally returned to its pre-Covid (2019) level in 2025. During the first quarter of 2026, international arrivals grew 2% globally (year-on-year), even as arrivals in the Middle East fell 14%. Questions 1 and 2 tell a clear story: globalization is not in broad retreat. Global trade is growing strongly in absolute terms, while international activity has also gained relative to domestic activity. But resilience does not mean stasis. Global flows can remain strong even as their underlying patterns change. Question 3 examines shifts in who connects with whom from a geopolitical perspective. Question 4 then applies a geographic lens to assess whether international flows are becoming more regional. Question 3: How is geopolitical rivalry reshaping international business patterns? Geopolitical rivalry is shifting international business patterns—but these changes are very uneven and smaller than many presume. Dramatic shifts are taking place between countries at the center of geopolitical tensions and policy shocks, especially the U.S. and China. At the global level, however, the evidence points to much more limited realignment. Global Trade Patterns Shift Only Modestly Dramatic policy changes have drawn attention to resulting shifts in trade patterns. While it is important to pay careful attention to what is changing, it is also essential to recognize how much remains unchanged. Figure 8 puts recent trade pattern shifts into perspective by measuring how much countries’ trade shares with individual trade partners change from year to year. Globally, trade patterns changed only slightly more in 2025 than in an average year—and less than during the early stages of the Ukraine war in 2022 and 2023. The pace of change is above average, but remains within historical norms. Meanwhile, greenfield FDI and M&A patterns showed no unusually large changes in 2025.