Global merchandise trade in Q1 2026 showed a seemingly strong performance: volume up 3.2% YoY and value surging 11%. But beneath the average lies a widening gap—Asia's export volume grew 12.9% driven by AI investments, while the Middle East saw exports plunge 11.9% amid geopolitical conflicts. This structural divergence is reshaping order flows and supply chain layouts for textiles and related industries.
Regional Divergence Behind the Data
Asia's trade expansion is not broad-based. China, South Korea, Singapore, Thailand, and Taiwan all saw export gains, but the momentum is highly concentrated in electronics and smart hardware supply chains. For textiles, this means Southeast Asian apparel manufacturing bases may not directly benefit from the AI-driven trade boom; instead, they could face capacity and logistics squeeze as electronics shipments compete for space and freight.
The Middle East's contraction is more alarming. Imports fell 9.7% and exports 11.9%, directly impacting demand for Chinese fabrics and home textiles, while also disrupting transshipment routes. Institutions predict continued pressure in Q2, urging exporters to reassess order fulfillment risks.
Chain Reactions in the US, Europe, and Energy Economies
North American imports fell 10.7% in volume and 7% in value—the steepest decline among major economies. This contrasts sharply with the front-loading in Q1 2025 due to tariff fears, indicating destocking is still underway, delaying recovery in textile and apparel orders. Europe's exports dropped 2.6% while imports inched up 0.6%, with weak manufacturing external demand suppressing high-end fabric and technical textile needs.
South America, Africa, and the CIS showed weak short-term export momentum, but since early 2023, South America's cumulative exports have grown 22.5% and imports 24.5%, second only to Asia; Africa's cumulative imports rose 25%, the fastest globally. This suggests resource-driven economies are building potential. If Q2 energy supply rebalancing materializes and oil exporters ramp up to fill Middle East gaps, demand for Chinese engineering fabrics, workwear, and home textiles could rise.
Signals from Top Trading Economies
Among exporters, South Korea led with 38.4% value growth, followed by Hong Kong at 38.3%, the US at 15.2%, China at 14.7%, and the EU at 9.2%. On the import side, Hong Kong surged 44.8%, China rose 23%, the UK 28%, while the US was the only major importer to decline (-13.6%). This divergence signals a shift in consumption gravity eastward, and Hong Kong's strong transshipment activity highlights the vitality of intermediate goods—textile firms can explore new market access via Hong Kong.