WTO Flags “Two-Speed” Future for Global Trade in 2026 as AI Boom Meets Geopolitical Shock

New outlook warns energy crisis could slow trade, while artificial intelligence continues to reshape global commerce.

The World Trade Organization (WTO) has warned that global trade in 2026 will be shaped by two powerful and opposing forces: a continued surge in artificial intelligence (AI)-driven demand and the destabilizing impact of rising energy and transport costs linked to conflict in the Middle East.

In its latest Global Trade Outlook and Statistics 2026, the WTO highlights a turning point for the global economy—where technological momentum is colliding with geopolitical risk, creating an uncertain but still positive outlook.

Strong 2025 Performance Driven by AI Surge

Global trade delivered an unexpectedly strong performance in 2025, with merchandise trade volumes expanding by 4.6%, nearly double earlier projections.

A key driver was the rapid expansion of AI-related industries:

• Investment in data centres, semiconductors, and AI infrastructure surged

• AI-related goods accounted for nearly 50% of global trade growth

• Despite representing only one-sixth of total trade, their impact was outsized

Asia remained the dominant force in global trade:

• Contributed 71% of total merchandise trade growth

• Led by strong exports from China, Singapore, Chinese Taipei, and Thailand

Meanwhile, North America saw a spike in imports, partly due to frontloading ahead of anticipated tariff increases.

Trade Growth Set to Cool in 2026

Despite strong momentum, WTO forecasts indicate a slowdown:

• Merchandise trade growth:

  • 2026: 1.9%

  • 2027: 2.6%

• Services trade growth:

  • 2026: 4.8%

  • 2027: 5.1%

The slowdown reflects the fading of temporary factors that boosted 2025 performance, including pre-emptive imports and peak AI infrastructure investment.

Middle East Conflict Poses Major Downside Risk

The biggest threat to global trade in 2026 is the ongoing conflict in the Middle East, which has triggered rising oil prices and disrupted transport routes.

If energy costs remain elevated:

• Merchandise trade growth could fall from 1.9% to around 1.4%

• Services trade growth could drop from 4.8% to 4.1%

Sectors most at risk include:

• Transport and logistics

• Tourism and travel

• Shipping and insurance services

In the Middle East, services trade is expected to contract, driven by flight cancellations, shipping disruptions, and higher operational costs.

AI Boom Could Offset Energy Shock

On the upside, continued strong investment in AI could partially counterbalance the negative impact of energy shocks.

If AI demand remains at 2025 levels:

• Global merchandise trade growth could gain an additional 0.5 percentage points

This positions AI as a key stabilizing force in global trade—potentially offsetting geopolitical disruptions.

Structural Shifts Reshaping Global Trade

Beyond short-term volatility, the WTO highlights deeper transformations in the global trading system:

AI Becomes a Core Driver of Trade

• Share of AI-related goods rose from 13% (2023) to nearly 17% (2025)

• Trade in these goods grew by 21.9% year-on-year

While North America is now the fastest-growing market, Asia dominates production, accounting for 62% of global AI-related trade.

Rising Trade Fragmentation

Geopolitical tensions continue to reshape trade patterns:

• US imports from China fell by 29% in 2025

• China redirected exports toward Asia, Africa, and Latin America

• Emerging markets saw strong import growth as supply chains diversified

This reflects a broader trend of decoupling and realignment in global trade networks.

Declining but Dominant MFN Trade

The share of trade conducted under the WTO’s Most-Favoured-Nation (MFN) principle declined:

• From 80% in 2024 to around 72% in early 2026

Despite this drop, MFN-based trade still accounts for nearly three-quarters of global merchandise trade, underscoring its continued centrality.

Key Questions for the Global Economy

The WTO identifies three critical uncertainties that will define trade dynamics in the coming years:

• Will the AI boom sustain its momentum?

• How long will energy market disruptions persist?

• Will trade fragmentation deepen or stabilize?

A Delicate Balance Ahead

The 2026 outlook presents a global economy at a crossroads—where innovation and instability are pulling in opposite directions.

While AI-driven demand offers a powerful engine for growth, rising geopolitical tensions and energy costs could significantly constrain trade flows.

As these dynamics unfold, the WTO will continue to monitor their impact on supply chains, global markets, and economic resilience, with policymakers facing increasingly complex trade-offs in an uncertain world.