Global trade growth rate may further decline

The World Trade Organization recently released the 2026 edition of its Global Trade Outlook and Data report, which pointed out that due to factors such as geopolitical tensions, the growth of global commodity trade and service trade in 2026 will be significantly lower than the level in 2025. The positive factor is that trade in artificial intelligence (AI) related products is expected to remain highly active and play a key role in supporting trade growth.

Geopolitical tensions have led to a slowdown in trade growth. The report predicts that the growth of global commodity trade volume will slow down from 4.6% in 2025 to 1.9% in 2026, and rebound to 2.6% in 2027. This forecast is lower than previous expectations, mainly due to geopolitical tensions, high oil prices, and trade policy uncertainty. The growth of service trade volume is expected to slow down from 5.3% in 2025 to 4.8% in 2026, and then rebound to 5.1% in 2027. The report points out that geopolitical tensions are the main factor leading to a slowdown in trade growth. The high oil prices caused by the current US Israel Iran conflict have had a significant negative impact on global trade, increasing transportation and production costs for businesses, reducing consumer purchasing power, and thus suppressing global trade demand. The report also pointed out that the increasing uncertainty of trade policies worldwide, including tariff increases and stalled trade agreement negotiations, has led to a decline in business and consumer confidence, affecting trade activities. The tariff measures and trade restriction policies implemented by various countries, especially the tax increase measures targeting specific countries, have reduced global trade flows. Although some tariff measures have been suspended or replaced, their uncertain impact on trade still exists.

The slowdown in trade growth has manifested differently in various regions around the world. The report points out that in the first quarter of 2025, North America experienced a significant increase in import volume due to the expected increase in tariffs, leading to a pre import situation. However, with the implementation of tariff measures, import growth slowed down after the middle of the year, and due to ongoing trade policy uncertainty and high oil prices, it is expected that trade growth in North America will continue to slow down in 2026. The European region achieved a shift in trade growth from negative to positive in 2025, but due to the impact of the US Israel Iran conflict, trade growth may suffer another setback in 2026. High oil prices and rising transportation costs have a negative impact on the export competitiveness of European companies, suppressing trade growth. Although the Asian region has performed outstandingly in global trade, overall trade growth is also facing pressure to slow down.

The decrease in the proportion of most favored nation treatment in trade indicates pressure on multilateralism. The data shows that the proportion of trade conducted under the most favored nation treatment clause in global trade has fluctuated in recent years, especially showing a significant decline in 2025, from about 80% at the beginning of 2025 to about 72% by the end of February 2026. This change reflects that although the most favored nation treatment clause still dominates in the global trade environment, its importance has weakened. The report believes that the reasons for the impact on most favored nation treatment are twofold: firstly, the intensive implementation of tariff measures by various countries, and secondly, the increase in preferential trade agreements. Since the beginning of 2025, the World Trade Organization has recorded over 60 tariff measures, affecting approximately 11% of global trade (calculated based on 2024 trade flows). These measures include trade restrictions and facilitation measures, which interact with the existing tariff system and result in a decrease in the proportion of trade conducted under the most favored nation treatment clause. Meanwhile, with the increase of bilateral and regional free trade agreements, many trade preferences are no longer based on most favored nation treatment clauses, but are provided through these preferential agreements, thereby reducing the relative trade volume under most favored nation treatment clauses.

The report points out that by 2025, the trade volume of AI related products will significantly increase, becoming an important driving force for global trade growth. The share of AI related products in global commodity trade has steadily increased from approximately 13% in 2022 and 2023 to 14% in 2024, and is expected to approach 17% by the end of 2025. This growth reflects the increasing global demand for electronic products and the expansion of demand for AI related components such as semiconductors and processors. The trade value of AI related products increased by 21.9% in 2025, reaching $4.18 trillion, accounting for 42% of the total global trade growth. This indicates that AI related products are not only growing rapidly in quantity, but also significantly increasing in value, contributing greatly to global trade growth. From a regional perspective, the North American market has the fastest growth in AI related product trade, with a growth rate of 32.4% by 2025. This is mainly due to the high demand for AI intensive equipment and data center hardware in the North American market. Asia's growth in AI related product trade is also significant, with a growth rate of 24.3% by 2025. The Asian region has become a major exporter of AI related products due to its centralized position in semiconductor production and electronic supply chains. The growth rate of AI related product trade in Europe is 10.6%, which is lower than that in North America and Asia. However, the demand for AI technology in the European market is steadily increasing, driving the import and trade of related products. The report believes that in the future, with the continuous increase in global demand for AI technology and the widespread application of AI technology, the trade of AI related products is expected to continue to maintain a strong growth momentum and become an important engine for global trade growth.