How International Trade and Business Investment Are Reacting to Shifting U.S. Trade Policy

On Tuesday, October 14, 2025, the Association of Foreign Press Correspondents in the United States hosted an educational program in partnership with DHL Group to discuss the DHL Global Connectedness Tracker. The tool, which provides regular updates about the state of globalization and global trade, was released together with New York University Stern School of Business.

This October 2025 edition  delivers the first systematic assessment of how international trade and business investment are reacting to shifting U.S. trade policy under President Donald Trump’s second term. The Tracker draws on over 20 million data points from more than 25 sources to provide a comprehensive overview of the changing landscape of globalization and global trade.

AFPC-USA heard from Professor Steven A. Altman, NYU Stern School of Business, lead author of the DHL Global Connectedness Report and Tracker, who shared an in-depth and data-backed analysis of the current state of international trade, shifting geographies and new areas of trade growth. The educational program was moderated by Entravision journalist Stephanie Ochoa, who previously received a Professional Excellence Award from AFPC-USA. 

AFPC-USA is solely responsible for the content of this educational program. Below, foreign journalists can read the takeaways from the discussion.

Glennah Ivey-Walker, DHL’s Vice President of Communications and Sustainability, opened the discussion by offering background on the DHL Global Connectedness Tracker, describing it as both “a concise report” and “an interactive website” that provides regular updates on globalization and global trade. She explained that the tracker complements DHL’s larger Global Connectedness Report, which has been published since 2011 in partnership with New York University’s Stern School of Business. 

Ivey-Walker noted that the tracker underscores the resilience and adaptability of global trade despite “rising geopolitical uncertainty and shifting trade patterns and policies.” She acknowledged that protectionism and trade barriers remain significant obstacles but emphasized that they have not “suppressed the ingenuity of businesses determined to connect and grow.”

Altman opened his presentation by introducing the new special update to the DHL Global Connectedness Tracker, which he described as the most comprehensive and timely recent assessment of globalization and global trade currently available. He shared that the report centers on how policy shocks affect the growth of international flows, whether geopolitical rivalry is fracturing the world economy, and if international flows are becoming more regional.

Altman then gave a live demonstration of how users can interact with and customize the tracker to explore areas of interest. He highlighted  that despite forecasts suggesting global trade in goods might decline or stagnate in 2025, trade volumes actually surged early in the year. By March, they were 6% above 2024 levels, and remained 4–6% higher in subsequent months. He called the first half of 2025 the fastest period of trade growth since 2010 (excluding the volatile COVID years).

A major driver of this growth, he explained, was a rush of U.S. imports as buyers tried to get ahead of new tariff increases. Although those imports peaked in March and fell below 2024 levels by June, global trade overall remained elevated, suggesting the story was broader than U.S. demand alone.

Steven A. Altman

He then pointed to China’s export strength as another key factor. Despite a sharp 15% decline in exports to the United States (a $51 billion drop), China redirected trade elsewhere — with exports to Southeast Asia (ASEAN) rising by $55 billion (15%), to Africa by $28 billion (25%), and to the European Union by $26 billion (8%). Altman called this “quite an expansion,” especially given that U.S. tariffs on Chinese goods had temporarily soared above 100%.

The fastest trade growth, however, was not in China or the U.S. but in Sub-Saharan Africa, followed by North America. Altman, speaking from Johannesburg, where DHL held the global launch of the Tracker, said the event was intentionally hosted there to highlight the African region’s economic momentum.

Altman’s demonstration gave the foreign correspondents in attendance the chance to see how the tool’s users can examine regional or country-level data, compare growth rates and absolute trade values, and filter charts to suit specific research or reporting needs (for example, identifying which European countries had the fastest trade growth). He also compared past performance to future forecasts, presenting trade growth projections compiled from four sources used in DHL’s Trade Atlas series. 

He said that tariff increases and policy uncertainty have led to forecast downgrades, particularly for 2026, though positive growth remains expected in all years through 2029. North America saw the largest downgrade, with its projected trade growth rate cut nearly in half, while South and Central America and the Middle East and North Africa experienced modest upward revisions. 

Altman noted that South and Central Asia is expected to experience the fastest trade growth going forward — with India playing a particularly large role — followed by Sub-Saharan Africa, the Middle East and North Africa (MENA), and South and Central America. 

Altman then offered a surprising finding: when comparing past and projected trade growth rates, he found virtually no difference. The compound annual growth rate of global trade volumes over the past decade was 2.5%, and the forecast through 2029, after recent downgrades, is now exactly the same: 2.5%. “Even with tariff increases,” he emphasized, “trade is still expected to grow as fast through 2029 as it did over the past decade.” In short, while tariffs are expected to slow growth, they will not stop or reverse globalization.

To move beyond trade volume data, Altman introduced the DHL Global Connectedness Index, which tracks 14 types of international flows including trade, capital, information, and people. The Index shows that the share of exports relative to global GDP (a measure of how much global production is traded internationally) remains near record highs after peaking in 2022. Additionally, the share of cross-border mergers and acquisitions has also remained stable, showing no meaningful decline.

Altman said these indicators suggest that companies are not retreating from international markets. Instead, they continue to invest abroad at historically consistent levels, showing that globalization is resilient. “Global trade has proven highly resilient, growing even in the face of U.S. tariff increases, with no general shift from international to domestic business,” he said.

On the topic of whether geopolitical rivalry is fracturing the global economy, Altman began with the United States and China, describing their trade relationship as “ increasingly fraught.” He noted that the share of U.S. imports from China has plummeted from 22% in 2017 to 13% in 2024, and down further to 9% in the first seven months of 2025. The same downward trend, though less pronounced, appears in China’s data — clear evidence of weakening ties between the world’s two largest economies. A chart in the tracker illustrates this divergence not just in trade, but across capital and information flows as well. Comparing data from 2016–2017 to 2024–2025, Altman said that the share of U.S. flows with China has fallen by 35%, and the share of China’s flows with the U.S. has fallen by 18% (a smaller decline due to anomalies in M&A data). Taken together, these figures reflect a broad separation in trade, investment, and collaboration, consistent with rising U.S.–China tensions.

Zooming out, Altman analyzed global trade patterns among geopolitical blocs, using classifications of countries’ geopolitical alignments from Capital Economics. He divided trade into three categories: trade between the U.S. and China directly, trade with and among each power’s close allies, and trade involving unaligned or neutral countries. He found that direct U.S.–China trade fell from 3.5% of world trade in 2016 to 2.2% in early 2025 — a steep drop but only a small slice of total global trade. Trade between rival blocs (U.S.-aligned vs. China-aligned countries) also declined modestly, from 12.5% to 10.2%, largely due to shifts in Russia’s trade flows after its invasion of Ukraine.

By contrast, trade between allied nations — countries with strong political ties — has remained stable. Altman noted that this reflects a pattern of “de-risking rather than friend-shoring.” In other words, countries are avoiding rivals rather than actively increasing trade with allies. Meanwhile, the share of trade involving unaligned or flexible countries has grown, from 42% to 47%, indicating that much of global commerce is now flowing through nations not firmly tied to either geopolitical bloc.

Interestingly, Altman pointed out that most international business already happens among friendly nations. He said that there is three times more trade among allies than with rivals, nine times more foreign direct investment occurs among allies, and twenty times more cross-border mergers and acquisitions happen within allied groups than between opposing blocs. While geopolitical tensions have produced some realignment, especially between the U.S. and China, the overall global economic system remains remarkably intact. Fragmentation, he said, is “still quite small in global perspective.”

Altman continued examining the tracker’s data, noting that U.S.–China trade began to decline even before tariffs were imposed, as companies had already started reorienting supply chains after Trump’s election. At the same time, U.S. imports from Vietnam have increased, suggesting manufacturers are diversifying away from China. He briefly mentioned Canada–U.S. relations, observing a slight dip in the share of Canada’s imports coming from the U.S. as trade tensions rose, though the effect was modest. The tracker, he explained, allows users to explore not just imports and exports but also foreign direct investment (FDI) and scientific collaboration, and to customize analyses by country and time period.

Altman also presented another visualization tool that profiles a country’s geopolitical trade alignment, showing how much of its economic activity is tied to the U.S., China, their close allies, or unaligned nations. Using South Korea as an example, he noted a declining share of flows with China after 2015, a period that included the THAAD missile-defense dispute, and an increasing share with the U.S. and its allies. He pointed out that, for many countries, flows with U.S. allies exceed those with the U.S. itself, underscoring the importance of the broader Western bloc rather than focusing solely on America.

Turning to his final topic—regionalization, he challenged the popular notion that trade is becoming more localized or “nearshored.” Data instead show the opposite trend: the share of world trade occurring within regional blocs has fallen to 50.7%, the lowest on record in early 2025. The average distance traveled by traded goods has reached a record 4,900 kilometers, suggesting global supply chains are lengthening, not shortening.

He added regional detail: a few years ago, North America appeared to be regionalizing, with shorter trade distances and more intra-regional activity, but that trend has since reversed. Mexico is a mixed case—its exports have become more regionally concentrated, mainly toward the U.S., but its imports are increasingly globalized. Across trade, FDI, and mergers and acquisitions, he concluded, there is no clear trend toward greater regionalization. The overall takeaway, he says, is that despite tariffs, geopolitical tensions, and “policy headwinds,” globalization remains resilient. Rather than retreating from cross-border engagement, companies and countries are adapting to manage new risks in a more turbulent international environment.

DHL

After Altman’s presentation concluded, Ochoa praised the DHL Global Connectedness Tracker as “fantastic for journalists,” noting that it helped make sense of the trade disruptions she observed while covering U.S. tariffs and trade policies in Washington, D.C. She cited examples from her own experience as a Mexican journalist, saying people were reporting longer wait times for goods coming from Mexico or China. She then asked Altman why trade growth in North America was still rising even though tariffs had affected Mexico — the United States’ largest trading partner — and the broader USMCA trade agreement.

Altman explained that the initial surge in trade was temporary, driven by a “front-loading wave” as companies rushed to move goods before tariffs took effect. However, looking ahead, he said North America had seen “the biggest downgrade” in trade growth forecasts because this was the region most directly affected by the new U.S. tariffs.

Ochoa followed up, noting that since tariffs were expected to remain in place for the duration of the Trump administration, it was puzzling that trade growth forecasts still showed stability or slight increases. Altman clarified that early forecasts had predicted a steep drop in 2025, but that decline was blunted by front-loading and a surge in Chinese exports. Instead, the main hit was now expected in 2026, as tariff implementation had been “much slower” than initially announced, delaying the full impact. Beyond 2027, he said, trade growth was expected to “normalize.”

Before turning to audience questions, Ochoa asked whether countries were diversifying trade — particularly in relation to China, which she called “the biggest actor” behind recent global trade changes. Altman confirmed that China was “changing very, very fast,” offsetting its sharp decline in exports to the U.S. with increases to ASEAN, Africa, and Europe. He highlighted that China had “substantially diversified its export markets” over the past decade — the share of trade with its top five partners had dropped by 10 percentage points — a shift he said had helped China sustain trade growth despite U.S. tariffs.

Ochoa read out the first audience question, asking Altman what he believed was the single biggest misconception about globalization that the DHL Global Connectedness Tracker sought to correct.

Altman responded that the most widespread misconception was the idea that the world was entering an era of “deglobalization.” He said much of that perception came from political rhetoric and policy shifts rather than from real changes in how global business operated. “Globalization,” he explained, was not just about treaties or diplomatic discourse, but about “how interdependent our countries [are] in actual flows of trade, capital, information and people.” By those measures, he said, the world remained deeply interconnected. The evidence showed that cross-border interactions had been “much more stable than the politics,” and that what many described as deglobalization was, in fact, still “a risk rather than a reality.”

Ochoa then asked if a better term might be “reshaping.” Altman agreed, saying the world was witnessing changes in the patterns of global activity rather than any overall decline in its levels.

A question from another journalist came in, and this journalist asked whether the tracker’s finding—that large deals were sustaining investment levels despite a drop in the number of cross-border transactions—should raise concerns about concentration or about smaller firms’ access to international opportunities.

Altman confirmed the trend. He said the overall value of cross-border investment had remained relatively steady, even as the number of transactions fell between the first and second quarters of the year—both for greenfield foreign direct investment (companies establishing new operations abroad) and mergers and acquisitions. He cautioned against overinterpreting the short-term data, noting that capital flows were naturally volatile. Still, he suggested the pattern might reflect heightened uncertainty in the policy environment, which tends to make smaller firms more cautious about committing to overseas investments. “It’s probably too soon to draw firm conclusions,” he said, “but it’s something to keep monitoring.”

Ochoa followed up by asking how the data showing no broad shift from foreign to domestic investment could be reconciled with the increasingly dominant narrative of economic nationalism. Altman replied that there was an important distinction between political narratives and aggregate business behavior. While political leaders might promote nationalism, firms around the world continued to invest where the best opportunities lay—sometimes domestically, sometimes abroad. When those decisions were aggregated, he said, the overall balance between international and domestic investment had “not really changed.” He added that geopolitical factors sometimes even spurred new foreign investments, citing Taiwan Semiconductor’s major U.S. expansion as an example of politics prompting—not discouraging—cross-border projects.

Ochoa then posed a question about whether countries not strongly aligned with major powers, such as Brazil, might benefit from shifts in global trade as the U.S. and China reduce direct exchanges. Altman confirmed that this was indeed the pattern seen so far. While he emphasized that it was too early to predict whether such “intermediate alignments” would remain viable, the data showed that countries maintaining flexible, non-aligned positions had been growing their share of global trade. He cited Brazil, Vietnam, and the United Arab Emirates as examples of nations benefiting from this realignment. Still, he cautioned that future geopolitical pressures might eventually force these countries to “choose a side,” a development that could alter the current dynamic.

NYU Stern School of Business

Ochoa then asked what indicators or early signals Altman would monitor to confirm whether deglobalization was truly taking hold. Altman said he would look for sustained and widespread declines across multiple measures—such as trade, capital flows, and cross-border mergers and acquisitions. For instance, he pointed to the sharp drop in the U.S. share of imports from China and the even steeper decline in trade between Russia and Western-aligned countries after the escalation of the war in Ukraine. Those cases, however, remained isolated examples rather than a global trend. If such declines spread more broadly and persisted, he said, that would be a clear sign of deglobalization.

Interestingly, he also offered a non-data-driven perspective, noting that globalization was fundamentally about interdependence—how much developments in one part of the world affected others. If people stopped caring about foreign events because they no longer influenced domestic outcomes, that would be a qualitative signal that deglobalization had occurred. “So far,” he said, “it doesn’t show up in the charts—and it doesn’t show up in how much we still care about what happens elsewhere.”

Finally, when asked whether geopolitical rivalry could fracture the global economy or slow trade growth, Altman acknowledged the risk but said a complete split between blocs was unlikely. He noted that most trade already occurred among “friendly” nations, while many others—those with intermediate alignments—had strong incentives to preserve ties with both sides. Citing IMF estimates, he said a full halt to trade between rival blocs could shrink global GDP by more than 7 percent, a cost that gave countries powerful reasons to avoid such an outcome. Altman concluded that while a moderate weakening of ties might continue, a total economic rupture was not a likely scenario, what he called “an immediate weakening of ties.”

Ochoa asked Altman for his perspective on Argentina’s foreign trade outlook amid ongoing U.S.-China tensions and what kind of global environment would best support developing economies. Altman clarified that the report did not include a country-specific analysis of Argentina but said that, in general, developing nations benefited most when they could maintain and expand trade ties globally. He noted a strong positive correlation between trade participation and economic growth, emphasizing that recent research confirmed this link as causal rather than coincidental. “Engaging more with globalization and trade,” he said, “can help accelerate growth.” Altman added that being able to sustain connections across geopolitical blocs was particularly advantageous for emerging markets.

When asked whether the world might be overestimating the risk of a full-scale economic decoupling, Altman said such an outcome was unlikely but still a risk worth managing. He suggested that companies should stress test their international relationships to prepare for potential disruptions, even if a total break remained improbable. “The prudent manager,” he said, “needs to understand the risks and think through how to manage them.”

Ochoa turned to China, noting that it had offset declining exports to the U.S. by increasing sales elsewhere, and asked which regions were absorbing that redirected trade. Altman said the largest share had gone to Southeast Asia, particularly to countries in the ASEAN region, followed by Africa and Europe. He cautioned that it was unclear whether these new trade patterns would be sustainable, citing limits on market demand in smaller economies and the potential for policy pushback if surges in imports led to domestic pressures in receiving countries. For now, few governments outside the U.S. had raised trade barriers in response, but Altman warned that this remained a key trend to monitor.

“So far we haven't seen that much of countries outside of the United States raising trade barriers in response, but it's something to watch out for because if you see surges of imports coming in, there may be pressure in different countries to protect domestic industries,” he said, adding that this is “something that we need to watch to make sure we are on top of that.”

On the subject of the impact of current U.S. trade and industrial policies, particularly tariffs, on the transatlantic trade balance and how European firms were adapting, Altman said the tracker had not analyzed the transatlantic trade balance, so he could not provide a direct answer. Regarding European companies, he noted they were in the early stages of adaptation, with some discussing investments in response to tariffs. He highlighted that trade flows adjusted quickly in the first half of 2025, pointing to Ireland-to-U.S. and Switzerland-to-U.S. trade, particularly pharmaceutical imports, as examples of firms frontloading goods to manage tariff impacts.

Ochoa then asked whether smaller economies in Asia or Africa were filling trade gaps created by U.S.-China tensions. Altman explained that medium to large economies—closer to China or the U.S.—had taken the bulk of this role. He cited Vietnam, Mexico, India, and parts of Southeast Asia as major beneficiaries, noting iPhone production shifting from China to India as a concrete example. He said smaller economies played a lesser role but still had potential, depending on size and proximity to key trade hubs. When asked about the most striking shift in global trade patterns after Trump’s return to office, Altman emphasized the speed of business adaptation, noting that trade volumes and patterns began changing immediately after his election, even before tariffs were implemented. Companies frontloaded shipments, and some trade partners—including Vietnam, Ireland, and Switzerland—quickly boosted exports, reflecting the agility of global firms.

Ochoa also asked whether lessons from Trump’s first term had influenced firms’ and governments’ current responses. Altman agreed, noting that both governments and managers had learned from prior trade conflicts, as well as from the pandemic-induced supply chain stress tests. He said these experiences had improved supply chain visibility and flexibility, allowing companies to weather the new shocks more effectively.

As their conversation drew to a close, Ochoa observed that, based on the slides, the forecast for global trade over the next decade appeared very optimistic despite ongoing challenges. Altman explained why trade could continue growing even with U.S. tariffs reaching levels not seen since the 1920s.

He said most global trade does not involve the U.S. For instance, in 2024, the U.S. accounted for only 13% of global imports and 9% of exports. While significant, the majority of trade occurs elsewhere, allowing countries like China to redirect exports to other growing markets. Other countries are not broadly following the U.S. in raising tariffs. Instead, many nations were actively negotiating trade agreements to secure market access, which counterbalanced U.S. tariff effects. Retaliation against U.S. tariffs was smaller than expected. Anticipated tit-for-tat tariff escalations with many trade partners did not materialize, further supporting continued global trade growth. All in all, these factors collectively explained the resilience and optimistic outlook for trade despite significant policy headwinds.