New Delhi [India], January 28 (ANI): Global trade is entering 2026 at a pivotal moment, with policy decisions and geopolitical shifts set to play a larger role than cyclical demand, according to a new report by HSBC Global Research.

After a volatile yet resilient 2025, the outlook for the coming year is marked by a tension between rising trade barriers and the emergence of new bridges. US tariff policy remains a central source of uncertainty, particularly with sector-specific Section 232 duties expected to remain in focus.

Although some tariff threats, such as those linked to Greenland, have been put on hold, their announcement alone has already unsettled markets and altered trade behaviour.

The report notes that front-loading of US imports earlier in 2025 has given way to a sharp pullback, distorting trade flows and contributing to slower global export growth in 2026. HSBC expects global export volume growth to moderate to around 2% year-on-year in 2026, down from 3.8% in 2025, with stronger performance likely in regions such as Central and Eastern Europe, the Middle East, Africa, and Latin America.

At the same time, competition over critical minerals is intensifying. China's dominant role in rare earths and other strategic inputs has pushed the US, Europe and allied economies to accelerate efforts to diversify supply chains.

While new partnerships and investment commitments are emerging, HSBC cautions that building alternative supply networks will take years and require substantial capital.

One offset to protectionist pressures has been a renewed push for bilateral and regional trade agreements. Reduced access to the US market has prompted many economies to pursue new deals, particularly outside the US.

Agreements involving the EU, India, the UK and several emerging markets are expected to support trade flows, even as concerns grow about the complexity created by overlapping rules and standards.

Technology is another key factor shaping the outlook. The report highlights artificial intelligence as a major driver of trade resilience, with AI-related goods accounting for a large share of recent trade growth.

Digitally delivered services, in particular, are expected to see strong long-term gains. However, HSBC warns that the heavy concentration of trade growth in AI-linked sectors also creates downside risks if investment momentum were to falter.

Overall, HSBC concludes that global trade in 2026 will be defined by a delicate balance between barriers and bridges. How governments and businesses navigate tariffs, resource security, new trade partnerships and technological change will determine whether trade resilience can be sustained in an increasingly fragmented global economy. (ANI)