US-China Trade Plummets to 2% of Global Total as Decoupling Accelerates

The latest DHL Global Connectedness Report 2026 highlights a continuing decoupling between the world's two largest economies even as overall globalisation remains strong.

The study, released by DHL in partnership with New York University Stern School of Business, showed that global economic ties remain resilient despite rising geopolitical tensions, tariffs and uncertainty in international trade policies.

According to the report, trade between the United States and China had reached a peak of 3.6 per cent of world trade in 2015.

However, the share has steadily declined in recent years, falling to 2.7 per cent in 2024 and further dropping to about 2 per cent during the first three quarters of 2025.

Cross-border business investment between the two countries is even smaller, accounting for less than 1 per cent of global investment flows.

Despite the weakening ties between Washington and Beijing, the report says globalization overall has remained stable.

The global level of connectedness stood at around 25 per cent in 2025, matching the record level seen in 2022.

The index measures international flows of trade, capital, information and people on a scale from 0 to 100.

John Pearson, CEO of DHL Express, said the findings show that countries and companies are continuing to maintain international ties even during uncertain times.

He noted that major global challenges such as poverty and climate change require cooperation and global thinking.

The report also found that global trade grew faster in 2025 than in any year since 2017, excluding the unusual fluctuations during the Covid-19 pandemic.

Much of the growth was driven by increased shipments ahead of expected tariff hikes in the United States and a surge in demand for artificial intelligence-related products.

According to the World Trade Organisation, AI-related goods accounted for about 42 per cent of global goods trade growth during the first three quarters of 2025.

Looking ahead, the report expects global trade to continue expanding, although at a moderate pace.

Goods trade is projected to grow at an average annual rate of about 2.6 per cent through 2029, broadly in line with growth over the past decade.

Steven A. Altman, director of the DHL Initiative on Globalisation at NYU Stern, said the political debate around globalisation often appears more dramatic than the actual changes in global business flows.

- IANS