Global Trade Surged 3.5% in Q1 on AI Boom as Europe Lags

A boom in artificial intelligence investment fueled a 3.5 percent surge in global trade volumes in the first quarter of 2026, creating a two-speed world economy where US and Asian trade flourished while Europe’s contracted. Data from the CPB Netherlands Bureau for Economic Policy Analysis showed US imports jumping 6.3 percent, with exports from China and other advanced Asian economies rising 11.3 percent and 10.1 percent, respectively.

“The disruptions in the Strait of Hormuz have induced a significant negative shock to trade and maritime transport in particular,” the United Nations said in a report this week, highlighting the geopolitical risks that contrast with the technology-driven growth.

The quarterly figures detail a sharp divergence in global trade flows. The surge in demand for AI-related hardware supercharged trans-pacific routes, with US imports climbing 6.3 percent from the previous quarter. This was met by an 11.3 percent jump in exports from China and a 10.1 percent increase from advanced Asian economies excluding Japan. In contrast, the Eurozone saw its exports fall 1.2 percent, while exports from Africa and the Middle East plunged 8.2 percent, reflecting the impact of regional conflict.

The data suggests the global trade map is being redrawn by technology supply chains, a dynamic that pits the AI investment boom against significant geopolitical headwinds. While the World Trade Organization forecasts trade will grow by a modest 2.5 percent for the full year, it notes that growth could accelerate to 3 percent if the AI-driven demand proves more resilient than expected.

AI Hardware Fuels Trans-Pacific Trade Surge

The trade expansion was almost entirely driven by investment in data centers and AI infrastructure. According to a recent United Nations report, the boom encompasses servers, high-performance computing equipment, and advanced semiconductors, a market dominated by firms like Nvidia. The surge in US imports reflects massive capital expenditure by American hyperscalers including Microsoft, Amazon Web Services, and Alphabet, which are building out their AI capabilities.

This demand is being met by manufacturers across Asia. South Korea, a key producer of memory chips, saw its exports in April soar 48 percent from a year earlier, indicating the trend has continued into the second quarter. The dynamic persists despite complex US export controls on advanced AI chips to China, which have shifted from blanket bans to a "controlled access" framework. While this has created uncertainty, the overwhelming demand from Western markets has more than compensated for any slowdown in direct sales to China for chipmakers like Nvidia.

Europe's Competitiveness Challenge

While the US and Asia ride the AI wave, Europe’s 1.2 percent export decline signals a deeper structural challenge. According to a recent speech from the European Central Bank, the bloc is losing export market share to China, particularly in medium- and high-technology sectors that have historically been a core strength. The analysis points to the lingering effects of the 2021-22 energy crisis, which disproportionately harmed the competitiveness of Europe's energy-intensive industries compared to rivals in Asia.

This competitive pressure is compounded by unfavorable currency movements and China's growing ability to produce the complex goods in which Europe specializes. The ECB noted that the export baskets of the Euro area and China are becoming increasingly similar, leading to direct competition in third markets, within China, and inside the European market itself. This divergence explains why the Eurozone is not participating in the current AI-driven trade boom and faces a more challenging outlook. The conflict in the Middle East, which has pushed energy prices higher, further exacerbates this competitive disadvantage for European producers.

This article is for informational purposes only and does not constitute investment advice.