Trade Key Themes 2026: Global trade wedged between AI and tariffs

We expect trade resilience will continue through 2026. But with the sugar hit of front-loading behind us, trade will be caught in a tug-of-war between tariffs and AI, capping growth at 1.2% in 2026. Three key themes underpin our outlook:

1. Trade will be wedged between tariffs and AI. AI-driven investment will keep high-tech manufacturing booming, lifting demand for semiconductors, processors, and the raw materials behind advanced technologies. Asia will capture most of the gains. Outside of AI, persistent US tariffs will continue to suppress demand and fragment trade.
2. Transshipments will give way to genuine production shifts, reshaping China’s role in global value chains. Firms are currently rerouting Chinese goods through lower-tariff economies such as Southeast Asia and India, but this workaround is temporary.
3. China is in the firing line for more protectionist policies, but trade liberalisation will continue elsewhere. China’s record exports and plummeting prices may encourage more countries to impose targeted tariffs. At the same time, trade liberalisation continues to deepen inter- and intra-regional trade linkages.

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