Twenty-twenty-five was the year global trade definitely did not die. But it changed in complex ways, some temporary (such as the frontloading of US imports in response to the threat of high tariffs), some likely to be permanent (such as the decline in direct trade between the US and China) and some in between (such as the boom in AI-related trade). Nevertheless, global trade in goods, the products targeted by the tariffs, has been strikingly robust, according to Geopolitics and the geometry of global trade: 2026 update, a preliminary evaluation of 2025 by the McKinsey Global Institute.
The report notes five noteworthy facets of what happened in 2025.
First, US and Chinese exports reached new highs, while world trade also grew faster than the world economy. The direction of trade shifted substantially, but more from what McKinsey labels “geopolitically distant” trading partners — notably the US and China — than from “geographically distant” ones. Similarly, the EU lost market share in Chinese markets. But India stood out for a large increase in the geographical distance of trade because shipments of smartphones to the US rose fast. (See charts).