Global merchandise trade posted a seemingly impressive performance in Q1 2026, with volume up 3.2% year-on-year and value surging 11%. Yet regional data reveals that this growth is highly dependent on Asia's AI-driven investment, while traditional markets like the Middle East and North America are experiencing volume and price declines. For textile exporters, this is not just a macro fluctuation but a substantive reshaping of order flows and profit margins.
Regional Divergence: Asia Strong, Middle East Under Pressure
Asia's export volume jumped 12.9% and imports rose 14.6% year-on-year in Q1, with export value soaring 20%, leading globally. China, South Korea, Singapore, Thailand, and Taiwan have all seen export growth, driven by AI chips, smart hardware, and supporting equipment. This growth is not single-market-driven but a cluster effect of the electronics supply chain, implying that demand for industrial textiles and functional fabrics linked to electronics may strengthen.
In contrast, the Middle East saw import volume fall 9.7% and exports drop 11.9%, with export value down 1%. Geopolitical conflicts directly suppress regional supply chains and logistics, significantly reducing cargo turnover efficiency. Institutions predict further pressure in Q2, prompting textile exporters to carefully assess logistics delays and payment risks when taking Middle East orders.
North America presents a pattern of strong exports but weak imports: export volume rose 7%, but imports fell 10.7%, and import value declined 7%, the worst among major regions. This reflects shrinking domestic demand and a high base effect from tariff front-loading. Europe shows a similar trend with export volume down 2.6% and imports up only 0.6%, as manufacturing external demand remains weak, limiting textile and apparel import growth.
Winners and Losers in Value Terms
In value terms, Asia's export value grew 20%, Africa and Central/South America each rose 14%, while the Middle East and CIS (energy exporters) both fell 1%. On the import side, Asia grew 22% and Africa 15%, while North America declined 7%. This data reveals a global purchasing power shift: capital is moving from energy-dependent regions to manufacturing and digital economy hubs.
Among major economies, South Korea's exports grew 38.4%, Hong Kong 38.3%, the US and China 15.2% and 14.7% respectively, while the EU only managed 9.2%. On imports, Hong Kong surged 44.8%, the UK 28%, China 23%, but the US fell 13.6%. This divergence means textile exporters overly reliant on Western markets may face shrinking orders, while demand growth in East Asia, Southeast Asia, and Africa deserves reassessment.
Implications for the Textile Industry
Overall, global trade has entered a phase of structural divergence in 2026. The AI industry is reshaping trade composition, with Asia at the core due to its complete manufacturing chain; Middle East geopolitical risks and weak Western demand are the main short-term drags. In Q2, energy supply rebalancing may boost exports from South America, Africa, and the CIS, potentially improving their import demand.
Notably, South America's cumulative export growth since early 2023 is 22.5% and imports 24.5%, while Africa's imports have grown 25%, showing long-term potential. Textile companies should watch these emerging markets for consumption upgrades and infrastructure-driven demand for fabrics and home textiles. Meanwhile, tariff and geopolitical uncertainties require supply chain flexibility to avoid over-reliance on any single market.