Global Trade and Trump Tariffs

Two new reports from the World Trade Organization and McKinsey Global Institute conclude that global goods trade grew 4.6% in 2025 despite the Trump administration’s new high-tariff regime, with trade routes and product mixes shifting rather than collapsing. The analyses say U.S. tariffs drove a steep drop in American imports of Chinese consumer goods, but China largely offset that by rerouting exports—especially electric vehicles, industrial components and memory chips—to Europe and emerging markets. At the same time, a surge in artificial-intelligence investment produced a 37% jump in global shipments of AI-related hardware and a 66% surge in such imports to the U.S., even as U.S. imports of other manufactured goods slipped. WTO Director-General Ngozi Okonjo-Iweala warns that this resilience is now at risk from the Iran war, with the effective choke on the Strait of Hormuz and damage to Gulf oil and gas infrastructure threatening energy flows and fertilizer supplies crucial to major agricultural exporters. The reports underline that the global trading system is highly adaptive to policy shocks like tariffs but may be far more vulnerable to physical disruptions of key chokepoints, a concern echoed by economists and traders watching war-driven oil and food-price pressures in the U.S.