China’s Export Engine Redirects, AI Strains Resources, U.S. Debt Climbs

Northern Trust’s weekly commentary argues that trade diversion, infrastructure bottlenecks and fiscal drift are reshaping the macro backdrop 

• China posted a record $1.2tn goods surplus in 2025; exports to the U.S. fell ~20%, but gains in ASEAN (+13%), Africa (+26%) and the EU offset losses, intensifying global scrutiny.

• AI expansion is tripling data-center water demand over a decade, with ~two-thirds of new U.S. sites in water-stressed areas, adding resource constraints to growth.

• The CBO projects ~6% of GDP deficits and debt rising toward 120% of GDP by 2036, as entitlements and higher rates outpace discretionary cuts.

Are export rerouting, resource scarcity and fiscal inertia converging into a new constraint regime? The full note explores the trade-offs.