There’s never been a shortage of predictions — or headlines — about globalization and where it’s headed. In the 1990s and early 2000s, as trade surged and global value chains expanded, globalization came to look like an unstoppable force. Supporters and critics disagreed about whether that was good or bad, but often shared an assumption: national borders were rapidly losing their economic significance.

Then came the global financial crisis of 2008–09, and the narrative reversed. Globalization was suddenly said to be in retreat. More recently, trade tensions, the pandemic, and growing geopolitical rivalry have fueled predictions that the global economy is fragmenting into rival blocs.

I have spent much of that time looking at what the data actually show. For 15 years, my co-authors and I have collaborated with DHL on a series of reports systematically tracking international flows of trade, capital, information, and people. One lesson from that work is that globalization rarely moves as dramatically or as uniformly as the prevailing narrative suggests.

Today, US tariffs have risen sharply and US-China strategic competition continues to intensify. Wars are disrupting major trade routes. Economic security has moved to the center of trade policy, industrial policy is resurgent, and governments are increasingly pursuing de-risking, friendshoring, and other strategies aimed at reducing international dependencies. If globalization were going into reverse, this would certainly seem like the moment.

But once again, the data tell a different story. Our latest DHL Globalization Tracker follows international flows through this period of extraordinary turbulence, with several key indicators now extending into mid-2026.

Trade is accelerating despite shocks

Global goods trade grew faster in the first half of 2026 than in any half-year since 2011, apart from the exceptional rebound after trade declined during the Covid-19 pandemic. That happened despite rising tariffs, the Iran war, and disruption to trade through the Strait of Hormuz. Global trade is being buffeted by powerful forces in opposite directions. Tariffs and conflict are creating new barriers. At the same time, the AI investment boom is generating enormous demand for semiconductors, data transmission equipment, and other goods produced through global value chains. So far, the forces supporting trade growth have been stronger. According to new World Trade Organization (WTO) figures, AI-enabling goods alone accounted for 47% of goods trade growth in the first half of 2026.

Nor is this just a trade story. International flows grew faster than domestic activity across all four pillars we track: trade, capital, information, and people. By our broadest measure, globalization reached a record high in 2025.

Geopolitical shifts are real — but concentrated

Still, there is no doubt that some international relationships are changing dramatically. The data confirm that the US and China have nearly halved their shares of flows with each other over the past decade, with China's share of US imports falling precipitously. Russia, too, has undergone a major reorientation of its international ties.

The striking part is how concentrated these changes remain. If the world were really splitting into separate US- and China-centered economic blocs, we would expect America's closest allies to be pulling sharply away from China as well. So far, they aren't.

The global significance of US-China decoupling also needs to be kept in perspective. Direct US-China trade accounted for only 1.6% of global goods trade in 2026 (January–May), while direct US-China activity accounted for less than 1% of global greenfield foreign direct investment projects and announced cross-border mergers and acquisitions deals. Remove US-China and Russia from the analysis, and much of the measured trend toward geopolitical fragmentation disappears.

Geopolitical rivalry can substantially reshape some international relationships without necessarily producing a broad realignment of global flows.

Decoupling or rerouting?

And even the apparent decoupling between the US and China deserves a closer look. China's share of US imports has fallen sharply, but direct imports tell only part of the story. A product entering the US from another economy may still contain Chinese components or materials. We therefore also track estimates of the Chinese value embedded in imports from other countries. On that basis, China's share of the value in US imports has declined only slightly through 2024, the latest year for which data are available.

Some of the economic interdependence between the two countries has been redirected rather than eliminated.

Is globalization becoming more regional?

There is one area, however, where the latest data may finally be catching up with the predictions: regionalization. For years, businesses and policymakers have been talking about bringing production and supply chains closer to home. Yet, through 2024, international trade was actually traveling longer distances, and the share taking place within regions was declining. That began to change in 2025, with a more pronounced shift in the first five months of 2026. If the trend continues, predictions of greater trade regionalization may have some empirical support.

But here again, the overall picture conceals some important differences. The shift is being driven primarily by East Asia, where intra-regional trade has increased, due in part to the same AI boom that's boosting global trade. North America, meanwhile, has actually seen average trade distances increase.

And investment flows show no comparable move toward regionalization. The average distance between the origin and destination of greenfield foreign direct investment projects continued to increase in 2026 (based on data through July), even as the share of projects within regions edged up slightly. Cross-border mergers and acquisitions showed no substantial shift in that direction.

It's also worth remembering something our research has shown consistently over the years: the world is already highly regionalized. Roughly half of international flows take place within major world regions. Geography has never stopped mattering, even as globalization has advanced.

A surprisingly strong outlook

Despite higher tariffs and geopolitical turmoil, forecasts for global trade growth through 2029 are now stronger than they were before the latest shocks. Trade volumes are projected to grow by an average of 3.4% annually from 2026 to 2029, compared with 2.7% over the preceding decade. Forecasts are not facts, of course, but the outlook has improved at precisely the moment when many observers might have expected it to deteriorate.

The gap between headlines and reality

Looking back over 15 years of tracking globalization, one lesson stands out: sweeping narratives rarely survive close examination of the data. Globalization was never quite the unstoppable force many imagined. Even at today's record level, our index measures the depth of globalization at just 25.8% — a reminder that most economic activity remains domestic rather than international. And despite the upheavals of recent years, predictions of globalization's reversal have so far proven premature.

Part of the explanation for the gap between perception and reality is simple: disruption is news; continuity usually isn't. A tariff announcement is news. A war disrupting a major shipping route is news. A company announcing plans to reshore production is news. Millions of companies continuing to buy, sell, invest, and operate across borders rarely make headlines.

And government policies, corporate plans, and geopolitical tensions tell us what might happen. International flow data tell us what has happened. Of course, today's policy changes may take years to work their way through investment decisions and supply chains. But if we want to understand the world as it is, rather than the world suggested by today's headlines, we need to keep measuring what actually crosses borders.

For now, the evidence points to globalization being selectively reshaped, not reversed.

About the DHL Globalization Tracker

The DHL Globalization Tracker is commissioned by DHL and authored by Prof. Steven A. Altman and Caroline R. Bastian of New York University Stern School of Business. Since the publication of the first DHL Global Connectedness Index in 2011, this series of reports has tracked international flows of trade, capital, information, and people to measure how deeply countries are connected to the rest of the world and how widely those connections extend.

The findings are published in the comprehensive DHL Globalization Report every two years, supplemented by more frequent updates in the DHL Globalization Tracker. The October 2026 Tracker draws on more than 30 million data points from over 25 public, private, and academic sources.

The interactive online Tracker allows readers to explore trends by country, region, and geopolitical alignment, with charts and data available for download.

[This essay was provided for publication by the Hinrich Foundation through the kind offices of Prof. Altman and DHL.]