You can talk about the shipping container industry and how it's the centre of global export systems but this is what very few people consider, for at least the next decade, China will continue to be the leader in the movement of physical goods. At $3.6 trillion, China moves more product than any other country will be able to match by creating a few factories in Vietnam or Mexico.
But there seems to be another side to this story that is being tracked and should be of interest, but not that many have paid enough attention on the right metrics.
This presentation chart says a lot about what you're not looking at.
Screenshot from X attributed to Visual Capitalist
There is an entire economy of service providers that do not rely on ships for their businesses. There are fiber optic cables, data centres in remote areas and there are over $740 billion worth of digital services exports being produced by the United States alone. That seems like a large number until you realize that it pales in comparison to the $425 billion produced by a country the size of Ireland. A country that is about 5 million people.
Apparently tariffs don't have a real effect on software updates. I found that funny because it shows more, the absurdity of the situation. You cannot blockade a Zoom call or Microsoft Teams meeting. You cannot search a cloud migration for illegal contraband. The entire model of how to enforce tariffs completely breaks down in this scenario. This is why some countries are making a very aggressive move into the digital service space and other countries are still having discussions about how to set steel quotas.
There is still a steady level of manufacturing, and we all know that this is true. The Germans certainly know this and are doing a great job at it. The UK impact is coming to a conclusion much slower than it should though and it's because they're smart enough to keep evolving. Both of these countries have steady growth rates in terms of increases in the number of manufactured goods produced, but the growth rate of digital services continues to increase at twice that of manufactured goods and the gap is only getting larger all thanks to the implementation of new AI tools over the last year or year and a half.
We have seen a boom in AI products and I believe 2024 to 2025 was the peak. It's only going to go higher and that'll put more significance on services than goods.
