Globalisation holds firm as US and China decouple
 Globalisation, often declared fragile in the face of geopolitical storms, has once again proven its resilience. The DHL Global Connectedness Report 2026, authored in collaboration with New York University’s Stern School of Business, shows that the world remains more interconnected than ever, even as the United States and China continue to pull apart.
Based on more than nine million data points across trade, capital, information, and people flows, the report offers a panoramic view of globalisation’s trajectory - and the findings are striking.
At 25 per cent, the world’s globalisation level in 2025 matched the record high set in 2022. That figure may sound modest, but it represents a historically elevated plateau.
Globalisation is not collapsing under the weight of tariffs, sanctions, or political rhetoric. Instead, it is holding firm, a testament to the enduring value of cross-border ties. As DHL Express CEO John Pearson put it, “globalisation is holding its ground - and that alone speaks volumes about its value.”
The resilience of globalisation is not uniform across all flows, but the overall picture is one of continuity rather than retreat. Trade, capital, information, and people are still crossing borders in record numbers, even if the pathways are shifting.
Global trade grew faster in 2025 than in any year since 2017, excluding the pandemic’s volatility. Much of this surge was driven by two forces: the race to build artificial intelligence infrastructure and the scramble to beat US tariff hikes.
AI-related goods accounted for 42 per cent of trade growth in the first three quarters of 2025, underscoring how technological revolutions can reshape global commerce. Meanwhile, US importers front-loaded shipments to avoid higher tariffs, temporarily boosting volumes before imports fell back later in the year.
Yet even with tariffs rising, trade is expected to continue expanding. The report projects global goods trade to grow by an average of 2.6 per cent annually through 2029, consistent with the past decade. One reason is that most trade does not involve the United States at all. In 2025, only 13 per cent of imports went to the US, and just 9 per cent of exports originated there. The rest of the world is busy trading with itself, often through new agreements designed to diversify markets.
Capital flows remain robust. Multinational firms continue to earn near-record shares of sales abroad, and while greenfield foreign direct investment dipped in 2025, overall FDI rose thanks to resilient cross-border mergers and acquisitions. The globalisation of capital shows no broad retreat.
Information flows, however, are facing headwinds. For two decades, cross-border data exchanges were the fastest-growing component of globalization. Since 2021, growth has slowed and volatility has increased, largely due to geopolitical tensions and restrictions on data transfers. The digital arteries of globalisation are narrowing, even as physical goods travel farther than ever.
People flows tell a different story. After collapsing during the pandemic, international travel, student mobility, and migration have rebounded to record highs. The human dimension of globalisation is thriving, reminding us that borders may be politically contested but remain porous to human ambition and curiosity.
The report’s rankings highlight the uneven geography of globalisation. Singapore tops the list as the most globalised nation, followed by Luxembourg and the Netherlands. Europe as a region leads the world, with North America and the Middle East & North Africa trailing. The United Kingdom stands out for the breadth of its global connections, while the United Arab Emirates has recorded the largest increase in globalisation since 2001.
These rankings underscore that globalisation is not evenly distributed. Some nations and regions are far more integrated than others, and their ability to leverage global ties gives them a competitive edge.
The weakening ties between the world’s two largest economies dominate headlines, but the report reminds us of their limited global weight. At its peak in 2015, US-China trade accounted for 3.6 per cent of world trade. By 2025, that share had fallen to just two per cent. Cross-border investment between the two giants is even smaller, less than one per cent of global flows.
This decoupling matters, but it does not define globalisation. Most countries continue to trade and invest with longstanding partners, and only a small fraction of flows - 4-6 per cent - have shifted away from geopolitical rivals over the past decade. Even then, the flows often go not to close allies but to countries with flexible geopolitical positions, such as India and Vietnam. The world economy is not splitting into rival blocs; it is diversifying.
Predictions of a shift from globalisation to regionalisation have not materialised. In fact, traded goods traveled farther in 2025 than ever before, averaging 5,010 kilometres. Greenfield FDI projects also reached record distances, averaging 6,250 kilometres. Longer distances mean less regionalisation, not more. Supply chains may be reconfigured, but they are stretching rather than shrinking.
As Professor Steven Altman of NYU Stern observed, “The politics and policy surrounding globalisation are much more volatile than the actual flows between countries.” Trade patterns in 2025 shifted more than in a typical year, but less than during other disruptions such as the early stages of the war in Ukraine. The risks to globalisation are real, but so is its resilience.
That resilience is the report’s central message. Globalisation is not a fragile construct waiting to collapse under pressure. It is a dynamic system that adapts, stretches, and reconfigures itself in response to shocks. Tariffs, tensions, and technological revolutions may alter the pathways, but the flows continue.
The DHL Global Connectedness Report 2026 offers a sobering but ultimately reassuring view. Globalisation remains at a record high, even as the US and China decouple. Trade is growing, capital is flowing, people are moving, and goods are travelling farther than ever. Information flows face challenges, but the overall system endures.
In a world beset by uncertainty, that endurance matters. Globalisation is not just about commerce; it is about solving shared challenges. The report reminds us that retreating behind borders is not the path forward. The world remains interconnected, and that interconnectedness is both a reality and a necessity. |
