Technological transformation is lifting global activity despite elevated U.S. tariffs and persistent policy uncertainty. Here are five charts that help illustrate this crucial macroeconomic trend.
Similar to the surprisingly resilient pace of U.S. economic growth in 2025 – which we discussed in Macro Signposts earlier this month – global trade and industrial production have also remained robust this year. These are unexpected trends given the significant policy uncertainty and what amounts to the largest tariff hike by a developed market country in a century.
Global industrial production and trade accelerated in early 2025 in anticipation of U.S. tariffs, which many producers believed would be a key feature of the Trump administration’s economic policy – so they front-loaded activity to build inventories in the U.S. Now, several quarters into the new U.S. trade regime, one might expect the front-loading of industrial production would by now be giving way to weakness (see Figure 1). So why isn’t it?
Data suggest this surprising strength in global production – at least in aggregate – is driven heavily by production of computers and components tied to AI infrastructure investment (see Figure 2). Production in most individual categories is exhibiting typical front-loading/payback dynamics surrounding the U.S. tariff announcements, but strength in AI-related equipment – together with auto and electric vehicle production – is bucking the trend, helping lift overall production.
Not every country is benefiting equally from the AI investment theme, but several Asian economies, including Taiwan, Japan, South Korea, and China, have seen meaningful gains in industrial production alongside the U.S. (see Figure 3). Indeed, Asia and to a lesser extent the U.S. are leading the world’s production of computers and related components (see Figure 4).
U.S. industrial production has also rebounded after a multi-year slump, largely thanks to technology and related products. Moreover, recent U.S. industrial production trends suggest that business fixed investment may have broadened into other equipment categories in the latter half of 2025, even as AI-related spending remains strong (see Figure 5).
Bottom line: Surprising resilience in global industrial production was another facet of a fast-evolving trend – namely, the surge in AI and its related technologies, components, and infrastructure. It’s reshaping the global economy.
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