China trade and governance risks
A slump in U.S.-China trade is rerouting global flows and making the globalization picture more patchwork than seamless. Reports show global trade rising overall even as U.S.-China volumes weaken, and Beijing’s public pushback on U.S. moves in science/tech plus warnings from U.S. officials about China’s role in Iran add policy‑risk layers that complicate multinational earnings visibility ( ).
The map of world trade is changing without shrinking. United Nations Trade and Development said global trade still grew by $2.5 trillion in 2025 to a record $35 trillion even as trade between the United States and China fell by roughly one quarter, or about $170 billion. (unctad.org) That means the old two-way highway between the world’s two biggest economies is carrying less traffic, but the cargo is not disappearing. United Nations Trade and Development said “connector economies” are stepping in as intermediaries, especially as developing economies in East Asia and Africa post stronger trade gains. (unctad.org) The shift is easiest to see in the numbers behind the headline. United Nations Trade and Development said goods trade added about $1.8 trillion in 2025 and services added about $700 billion, with South-South trade growing about 9 percent and outpacing the global average. (unctad.org) So companies that once shipped directly from China to the United States are increasingly dealing with a longer chain. A factory order can now move through a third country, pick up new paperwork, and reach the same customer with a different route, a different tariff bill, and a different political risk profile. (unctad.org) Beijing is also making clear that trade friction is now tied to science policy, not just tariffs. Xinhua reported on April 10 that China denounced a United States move it said would sabotage “normal sci-tech exchanges” and cooperation between the two countries. (english.news.cn) That matters because science and technology cooperation sits upstream of trade. When governments fight over research links, export controls, and lab access, the pressure eventually reaches chip tools, industrial software, telecom gear, medical equipment, and the earnings forecasts attached to them. (english.news.cn) The United States side is adding another layer that has nothing to do with customs forms. On April 10, United States Trade Representative Jamieson Greer said Washington wants a stable relationship with China, but Chinese involvement with Iran in ways that go against United States interests “would complicate matters.” (usnews.com) United Nations Trade and Development is already warning that 2026 looks more fragile than 2025. Its April update said trade growth is expected to slow later in 2026 because of trade tensions, higher trade costs, geopolitical uncertainty, inflation pressure, and shipping disruptions linked to the Strait of Hormuz. (unctad.org) Put those pieces together and the picture is not “globalization ended.” The picture is a more patched-together system where trade can keep rising in aggregate while the United States-China lane weakens, rerouting through connector countries and forcing companies to price in tariff risk, technology restrictions, and Middle East spillovers at the same time. (unctad.org) (usnews.com)
