Global Trade Growth Set to Slow in 2026 as AI Boom Fades and Middle East Conflict Weighs on Outlook

By Guy José Bendaña-Guerrero & Asociados

The World Trade Organization released its latest Global Trade Outlook and Statistics report on March 19, 2026, presenting a picture of slowing trade momentum after an unexpectedly strong 2025.

Global merchandise trade growth is forecast to slow to 1.9% in 2026, down from 4.6% in 2025, as trade is expected to normalize following a surge in AI-related products and the frontloading of imports to avoid new tariffs. Commercial services trade growth will ease to 4.8% in 2026, then accelerate again to 5.1% in 2027. Together, goods and services trade will grow 2.7% in 2026, compared with 4.7% in 2025. Global GDP growth is projected to moderate slightly from 2.9% in 2025 to 2.8% in both 2026 and 2027. 

Why 2025 Was So Strong

The stronger trade performance in 2025 was largely fueled by a boom in AI-related goods, including semiconductors and data infrastructure. Trade in these products surged 21.9% year-on-year to $4.18 trillion, accounting for 42% of total trade growth despite representing a relatively small share of overall volumes.

In addition, the overall negative impact of tariffs in 2025 was less than predicted, due to the suspension of new US tariffs until August, limited retaliation from other economies, and numerous tariff exemptions. 

The Middle East Risk

The ongoing conflict in the Middle East threatens critical global transport corridors, with traffic through the Strait of Hormuz collapsing from 138 commercial vessels per day to almost zero. The region accounts for 7.4% of global transport services exports and serves as a key hub connecting Europe, Asia, and Africa. Disruptions have cancelled over 40,000 flights and increased transport and insurance costs. 

If crude oil and liquefied natural gas prices remain elevated throughout 2026, world merchandise trade growth would be reduced by 0.5 percentage points to just 1.4%. Services trade would also grow at a slower rate of 4.1%. Global GDP growth could be cut by 0.3 percentage points. WTO

Regional Breakdown

Under the baseline scenario, Asia is expected to lead merchandise trade growth in 2026, with imports rising by 3.3% and exports by 3.5%. South America is also projected to post strong export growth of 3.5%. In contrast, North America's imports growth would remain flat at 0.3%, Europe's exports are forecast to stagnate at 0.5%, and the Middle East is expected to see a sharp slowdown in exports to 0.6%. 

Upside and Downside Scenarios

WTO economists still see potential upside if the Middle East conflict is short-lived and AI-related spending remains strong throughout 2026 and into 2027, which could lift merchandise trade growth by 0.5 percentage points to around 2.4% in 2026 and 2.7% in 2027. WTO economists stress that both upside and downside scenarios could unfold simultaneously, leaving overall trade growth close to the baseline projection. 

What Officials Said

WTO Director-General Ngozi Okonjo-Iweala said the outlook reflects the resilience of global trade, supported by trade in high-technology products and digitally delivered services, adaptations in supply chains, and the avoidance of tit-for-tat retaliation on tariffs. She also cautioned that sustained increases in energy prices could increase risks for global trade, with potential spillovers for food security and cost pressures on consumers and businesses. 

WTO Chief Economist Robert Staiger noted that the two forces behind 2025's unusually strong trade growth — frontloading of imports in North America and the surge in AI-related goods — are unlikely to persist through 2026.