Global trade grew 6.5% in 2025, outpacing overall economic growth, driven largely by AI-related goods such as semiconductors, graphics cards, routers, and servers. McKinsey Global Institute (MGI) reports that AI-linked products accounted for about one-third of this trade growth, highlighting AI’s central role in global commerce.
The US led this surge, adding half of the world’s new data center capacity in 2025 to support AI’s computational demands. Kweilin Ellingrud, senior partner at McKinsey, compares this AI investment boom to a “space race,” emphasizing its long-term economic potential. Since 2022, revenues from semiconductors, cloud services, and AI software have increased by $500 billion globally, with market capitalization in these sectors rising by $11 trillion.
However, McKinsey warns of a possible AI investment bubble if revenue growth doesn’t keep pace with spending, underscoring uncertainty in monetizing AI despite rapid infrastructure expansion.
Strategic Reconfiguration of China-US Trade Relations
Despite global AI trade growth, US-China bilateral trade declined 30% in 2025, even as both countries hit record import and export levels independently. This drop stems from intensified trade tensions, tariffs, and export controls on advanced technologies.
Jeongmin Seong, MGI partner, describes this not as “deglobalization” but a “reconfiguration” of globalization, shifting from efficiency-driven trade to a multipolar system focused on resilience and geopolitical concerns. US imports from China fell by about $130 billion, mainly due to tariffs on consumer electronics like smartphones and laptops. The US responded by sourcing roughly two-thirds of these goods from India, Vietnam, and Thailand.
China’s exports of final consumption goods to the US declined 2%, but its trade in intermediate goods—components for manufacturing—increased nearly 9%. This reinforces China’s role as the “factory to the factories,” supplying parts across global value chains despite reduced direct exports to the US.
ASEAN Emerges as a Critical Trade Connector Amid US-China Strains
The shift in China-US trade flows benefits Southeast Asia. ASEAN has surpassed the US as China’s largest trading partner, becoming a key connector in global trade by facilitating intermediate goods and assembly operations that feed Chinese manufacturing and global exports.
This trend reflects geopolitical pressures and supply chain diversification as companies and governments seek to reduce dependence on any single country amid the Sino-American tech war. ASEAN’s rise is both economic and geopolitical, serving as a buffer and alternative manufacturing hub within the tech ecosystem.
Divergent Growth Rates in AI Trade Highlight Tech War Impact
AI trade growth diverges sharply between the US and China. US imports of AI hardware jumped 66% in 2025, driven by heavy investment in AI infrastructure. China’s AI trade growth was more modest at 16%, constrained by US export controls limiting access to advanced semiconductors and AI technologies.
China is investing heavily in building a self-sufficient AI manufacturing base, with annual R&D spending over $500 billion—second only to the US. This push for indigenous innovation aims to bypass export restrictions and reduce foreign reliance, reflecting China’s strategic focus on resilience.
This divergence mirrors the broader US-China tech rivalry: the US leads in AI hardware imports and cutting-edge R&D, while China emphasizes self-reliance, reinforcing the multipolar trade environment McKinsey describes.
Multipolarity and Resilience Redefine Global Trade Paradigms
McKinsey’s 2026 update signals a shift from globalization focused on free trade and efficiency to a multipolar trade system prioritizing resilience and fair trade amid geopolitical friction and supply chain vulnerabilities.
Jeongmin Seong contrasts the old era of global efficiency with the new era of multipolarity and resilience, reshaping bilateral trade, supply chains, investment, and technology development.
For AI, trade growth remains strong but increasingly fragmented along geopolitical lines. Supply chains will regionalize, and strategic dependencies will be managed to avoid vulnerabilities. Countries and companies balancing innovation with security will benefit most from AI-driven trade expansion.
Implications for China’s AI Industry and Global Positioning
China’s evolving trade profile has major implications for its AI ambitions. Its “factory to the factories” model and rising R&D investments position it as a key player in global AI supply chains despite external pressures. ASEAN’s role as a trade intermediary further integrates China into regional networks, supporting resilience.
However, decoupling pressures and export controls challenge China’s AI growth. Its slower AI trade expansion compared to the US reflects restricted access to advanced technology. China’s focus on self-sufficiency and innovation is critical to maintaining competitiveness.
This evolving landscape suggests a fragmented global AI ecosystem with leadership distributed among multiple powers. China’s success will depend on scale, independent innovation, and regional partnerships to sustain its AI industry amid geopolitical stress.
AI as a Catalyst in a New Geoeconomic Order
McKinsey’s findings highlight AI as a major driver of global trade growth and a transformative force in the global economic order. Its impact extends beyond economics into geopolitics, trade relations, and supply chain structures. The shifting China-US trade patterns reflect strategic recalibrations shaping global commerce in the coming decade.
As the AI “space race” intensifies, countries must navigate technological ambition, geopolitical rivalry, and economic resilience. The emerging multipolar landscape will reward those who harness AI’s potential while managing geopolitical risks, marking a new chapter in technology and global trade.