WTO says AI goods trade surged 40% in Q1, offsetting Gulf war drag

Global merchandise trade grew faster than expected in the first quarter of 2026, with a boom in artificial intelligence-related goods more than compensating for the early effects of the Persian Gulf conflict, according to a joint report from the World Trade Organization and UNCTAD published on Friday.

Seasonally adjusted world merchandise trade volume rose 1.9 percent quarter-on-quarter and 3.2 percent year-on-year in the first quarter, while the US dollar value of trade in AI-enabling goods jumped more than 40 percent year-on-year. The WTO said the performance exceeded its March baseline forecast, which had projected 1.9 percent volume growth for the full year.indexbox+1

AI Investment Lifts Asia

The surge in demand for AI infrastructure drove trade gains concentrated in Asia. The region's exports rose 12.9 percent and imports climbed 14.6 percent year-on-year in volume terms, with growth fueled by intra-regional circulation of AI-enabling goods. Export gains came not only from China but also from Singapore, South Korea, Thailand and Chinese Taipei.moneycontrol+1

Office and telecommunications equipment was the strongest product category in value terms, rising 44 percent year-on-year, followed by ores and other minerals at 27 percent. UNCTAD's separate July Global Trade Update estimated goods trade reached approximately $13.7 trillion in the first half of 2026, up 12.5 percent from a year earlier, with semiconductors up 25 percent and critical minerals up 38 percent.unctad+1

Hormuz Disruption to Weigh on Q2

The WTO warned that the Strait of Hormuz, effectively closed since early March following the outbreak of war in the Persian Gulf, will exert a heavier drag on trade from the second quarter onward. "The effects of the Strait of Hormuz disruption on world merchandise trade is expected to become visible primarily in data from April 2026 onward," the WTO said.moneycontrol

Middle East export and import volumes fell 9.7 percent and 11.9 percent year-on-year in Q1, with world crude oil imports from the region down roughly 45 percent in March and LNG imports down 52 percent. WTO Director-General Ngozi Okonjo-Iweala warned at a forum in Abuja that government responses to Hormuz disruptions "have not fully offset energy and food price pressures on vulnerable developing nations."nigeriannewsdirect+2

Outlook Remains Uncertain

The WTO said the trajectory of global trade now hinges on the balance between continued AI-driven investment and the deepening economic fallout from the Middle East conflict. An updated trade forecast is scheduled for October.indexbox+1