The numbers look healthy until you read what is doing the lifting. Global goods trade volumes rose 4.6% last year and services grew 5.3%, according to the WTO's annual report. But AI-related technology — semiconductors, networking gear, data-center hardware — accounted for roughly one-sixth of goods trade and close to half of all trade growth. As WTO chief economist Robert Staiger warned, strong AI exports "may be masking some of the drop in world trade that might otherwise be occurring." Take that single sector out and the picture of a resilient trading system starts to blur. The geography of that AI boom matters. Asian exporters dominate; Africa, Latin America, the Middle East, and much of Europe are barely in the frame. This is not broad-based trade growth reinforcing global development — it is a narrow tech pipeline concentrating gains in a handful of economies while the rest of the world trades sideways. Trump's tariff regime has accelerated structural rewiring. US imports from China fell roughly 28% last year, while imports from the rest of the world climbed nearly 10%, with Vietnam, Taiwan, and Mexico absorbing the diverted flows. Country-specific duties now break the WTO's foundational most-favored-nation principle. About 72% of global goods still trade on WTO core terms, down from approximately 80% in 2022. The erosion is steady, not dramatic — which makes it easier to ignore. The energy picture illustrates both adaptation and fragility. The EU slashed Russian pipeline gas dependence from 37% to around 10% since late 2021, replacing it with LNG from the US, Norway, Australia, and Kazakhstan. When Iran's closure of the Strait of Hormuz disrupted oil flows, Saudi Arabia and the UAE rerouted via pipeline, while the US, Kazakhstan, Brazil, and Venezuela increased production and nations drew down some 300 million barrels of strategic reserves. Brent crude has nonetheless traded above $100 for much of the Iran conflict, and analysts warn of dangerously tight supply headed into winter. The deeper structural question is whether all this rewiring constitutes adaptation or fragmentation. WTO data shows world trade has grown only as fast as global GDP since about 2015 — globalization stalled before tariffs and wars made headlines. LSE economist Thomas Sampson puts it plainly: "The world is certainly not becoming more globalized. But it's still an open question whether we're actually at deglobalization or just shifting around who we trade with." The institutional stakes are enormous. WTO economists model three scenarios: further fragmentation along geopolitical blocs cuts global GDP by roughly 5% by 2050; collapse of multilateral rules into a patchwork of bilateral deals costs closer to 7%, with the poorest economies hit hardest; reinforcing multilateral rules, by contrast, could raise global GDP by about 3%. That is a 10-percentage-point spread between best and worst outcomes. Sampson warned that "trust in the US as a trading partner has collapsed" and recovery could take many years regardless of who sits in the White House. Three alternative architectures are being floated for a post-WTO world: continuing Trump-style bilateral tariff negotiations, a web of free-trade deals between economic blocs including BRICS nations, or a coalition of the willing — EU, Japan, Canada, Australia, Mexico — trading by WTO-style rules at a scale the US and China could not ignore. Bruegel's Camille Reverdy thinks the EU would prefer a reformed WTO, noting Brussels still wants to be the leader of free and multilateral trade. But preference and outcome are different things, and the clock is running.
