-
Globalization held steady at a high level in 2025 despite escalating geopolitical tensions, rising U.S. tariffs, and unprecedented uncertainty over trade policies
-
Globalization level at 25% in 2025, in line with the record high set in 2022
-
Even as the biggest economies U.S. and China decouple, most countries continue to engage with their longstanding partners
-
Over the past decade, only 4–6% of global goods trade, greenfield FDI, and cross-border M&A have shifted away from geopolitical rivals
-
Global trade grew faster in 2025 than in any year since 2017, excluding the volatile COVID-19 period
-
Global goods trade is projected to expand by an average of 2.6% per year through 2029
-
Singapore again ranks as the world’s most globalized nation while Europe is the most globalized region
HANOI, VIETNAM — Globalization held steady at a high level in 2025 despite escalating geopolitical tensions, rising U.S. tariffs, and unprecedented uncertainty about future trade policies, according to the 2026 Global Connectedness Report by DHL and New York University’s Stern School of Business.
Measuring globalization on a scale of 0% (nothing crosses national borders at all) to 100% (a world where borders and distance have ceased to matter), the 11th edition of the report pegs the world’s level of globalization at 25% in 2025, in line with the record high set in 2022.
At the same time, though, a 25% level means the world is still ways away from being fully globalized. Moreover, in many areas, international flows could expand further in the absence of policy constraints.
The report analyzes the state and trajectory of globalization by measuring the depth and breadth of international flows of trade, capital, information, and people around the world.
The 2026 edition is based on more than nine million data points and ranks the connectedness of 180 countries, accounting for 99.6% of global gross domestic product and 99% of the world’s population.
“Globalization is holding its ground – and that alone speaks volumes about its value,” said John Pearson, chief executive officer of DHL Express, at a media briefing in Hanoi, Vietnam on March 10.
“From poverty to climate change, the world’s biggest challenges can only be solved through global thinking. The DHL Global Connectedness Report shows that countries and companies are not retreating behind national borders. That is good news. DHL strengthens global ties by connecting markets, businesses, and people so they can adapt, diversify, and unlock new opportunities – even in uncertain times,” Pearson added.
Steve Altman, director of the DHL Initiative on Globalization at NYU Stern’s Center for the Future of Management, said the data “does not show a general pattern of globalization going into reverse.”
“On the contrary, international flows are stable relative to domestic activity. Most countries maintain ties with their traditional partners, and most of those are happening over longer–rather than shorter–distances,” he noted.
U.S. importers accelerated shipments early in the year ahead of tariff increases. U.S. imports dropped below prior-year levels, but rising Chinese exports to non-U.S. markets helped sustain global trade volumes. Trade in artificial intelligence (AI)-related goods such as semiconductors and surged as countries and companies raced to build AI infrastructure. AI-related products drove 42% of goods trade growth in the first three quarters of 2025, according to World Trade Organization figures.
Looking ahead, the report noted that recent U.S. tariff increases are expected to modestly slow trade growth in 2026 – but not stop it.
Global goods trade is projected to expand by an average of 2.6% per year through 2029, in line with the past decade.
The report noted that one reason trade can keep growing despite U.S. tariff hikes is that most trade does not involve the U.S.
In 2025, only 13% of imports went to the U.S., and 9% of exports came from the U.S. In addition, many countries are pursuing new trade agreements to secure access to alternative markets.
In terms of the effect of the Middle East conflict, Altman said it is “too soon” to tell. To add some perspective though, Pearson said the MENA (Middle East and North Africa) region accounts for 4% to 6% of global trade “depending on where you draw the line.”
READ: UNCTAD warns vs Hormuz blockade impact on global trade
Other international flows
Beyond trade, the report finds diverging trends across other international flows.
There is no broad shift of investment from foreign to domestic markets. Multinational firms still earn near-record shares of sales abroad. While announced greenfield foreign direct investment (FDI) fell in 2025, overall FDI flows rose, and cross-border mergers and acquisition activity remained resilient.
Over the past two decades, information flows delivered the largest globalization gains. Since 2021, growth has slowed and become more volatile. Geopolitical tensions and restrictions on data flows may now be materially limiting the globalization of information.
After collapsing during the COVID-19 pandemic, people flows have fully recovered. The latest data show international travel, student mobility, and migration all at record highs.
The report also finds that ties between the world’s two largest economies – the U.S. and China – continue to weaken. However, these ties are surprisingly small in a global perspective. For example, trade between the U.S. and China accounted for 3.6% of world trade at its peak in 2015, before falling to 2.7% in 2024 and to only 2% during the first three quarters of 2025. The U.S.–China share of international business investment is even smaller – less than 1% in 2025.
Even as the U.S. and China decouple, most countries continue to engage with their longstanding partners. Over the past decade, only 4–6% of global goods trade, greenfield FDI, and cross-border M&A have shifted away from geopolitical rivals. Of these flows, most have not moved to close allies but to countries with flexible geopolitical positions, such as India and Vietnam. Overall, the world economy remains far from a broad split into rival blocs.
“The politics and policy surrounding globalization are much more volatile than the actual flows between countries,” Altman said. “Global trade patterns changed more in 2025 than they do in a typical year, but less than they did during other recent disruptions such as the early stages of the war in Ukraine. Sound decision-making requires a calibrated view of how much global business ties are really changing. The risks to globalization are real, but so is the resilience of global flows.”
Geopolitical tensions and supply chain concerns have led many observers to expect a shift from globalization to regionalization. In 2025, however, traded goods traveled the longest average distance on record (5,010 kilometers). The average distance for greenfield FDI projects also rose to a new high (6,250 kilometers). Most other international flows are stretching over longer distances as well, and longer distances indicate less regionalization. Predictions of a broad move from global to regional business have not materialized – at least not yet.
Most globalized
In the report’s country ranking, Singapore again ranks as the world’s most globalized nation, followed by Luxembourg and the Netherlands.
The Asia Pacific region is one of the world’s strongest pillars of global connectedness with several markets continuing to post strong breadth and depth of international ties. Broad-based gains were observed across the Southeast Asia, Northeast Asia, and Oceania regions. The report shows East Asia & Pacific’s share of world trade has climbed from 24% (2001) to 32% (2025), underscoring the region’s long-run momentum. Several other economies in Asia Pacific also advanced sharply in the global connectedness ranking: Malaysia (#16; +13 ranks), Thailand (#27; +7), Korea (#31; +6), Taiwan (#32; +4), and Vietnam (#36; +3).
READ: PH drops to 59th place in 2026 DHL Global Connectedness Report
Intra-Asia trade has also strengthened since 2023. The report’s country profiles show that Asia-Pacific economies are deeply networked within the region, with most major trade and investment flows anchored in Asian partner markets. At the same time, China’s redirected exports to ASEAN markets—up 13% (+US$79 billion) in 2025 — further cement ASEAN’s position as a fast growing trade corridor.
Overall, Europe is the most globalized region, followed by North America and the Middle East & North Africa. The United Kingdom has the most broadly distributed flows worldwide. The United Arab Emirates, meanwhile, recorded the largest increase in globalization since 2001.—Roumina Pablo
