Global merchandise trade value jumped 11% year-on-year in Q1 2026, but this headline masks a sharp regional divergence: Asia saw double-digit growth in both imports and exports, while the Middle East contracted by nearly 10%. As AI investment becomes the core engine of trade growth, the traditional growth logic of energy-dependent regions is being disrupted, forcing textile and manufacturing supply chains to reposition.
Divergence Behind the Data
The WTO-UNCTAD joint monitoring report for Q1 2026 shows that seasonally adjusted global trade volume rose 1.9% quarter-on-quarter and 3.2% year-on-year; trade value increased 2% q/q and 11% y/y. This growth is notable given the high base created by North America's tariff-front-loading imports in Q1 2025, indicating stronger-than-expected resilience. However, regional contrasts are stark: Asia's import and export volumes surged 14.6% and 12.9% y/y respectively, with exports up 5.5% q/q and imports up 7.2% q/q. In contrast, the Middle East saw imports fall 9.7% and exports drop 11.9% y/y, with further pressure expected in Q2.
This divergence is not accidental. Asia's growth is directly driven by AI supply chains—China, South Korea, Singapore, Thailand, and Taiwan (China) collectively boosted exports of AI chips, smart hardware, and supporting equipment. Meanwhile, the Middle East's contraction stems from geopolitical disruptions to supply chains and logistics. For textile exporters, this means traditional Middle East market logic is weakening, while Asia's electronics spillover may create demand for fabrics and accessories.
Energy Regions and Western Markets
South America, Africa, and the CIS region showed weak export momentum in Q1: South America grew only 0.3% q/q, Africa fell 2.5%, and CIS dropped 7.4%. Over a longer horizon since early 2023, South America's cumulative exports and imports grew 22.5% and 24.5% respectively, second only to Asia; Africa's cumulative imports grew 25%, the highest globally. Industry insiders expect a rebound in Q2 as oil exporters ramp up production to fill the Middle East's supply gap. This suggests that purchasing power and import demand in resource-rich countries may recover.
In Western markets, divergence is clear: North American exports rose 7% y/y but imports fell 10.7%, reflecting weak domestic demand; Europe's export volume dropped 2.6% while imports edged up 0.6%, with manufacturing orders weak. Textile exporters targeting the US and EU may face order declines, making it prudent to pivot toward intra-Asia trade or emerging resource-based markets.
Growth Tiers and Import Patterns
In value terms, Asia's exports surged 20% y/y, leading globally; Africa and South/Central America each grew 14%, while only the Middle East and CIS saw slight declines of 1%. On the import side, Asia grew 22%, Africa 15%, while North America fell 7%, the worst among major regions. Among top exporters, all five saw positive growth: South Korea led at 38.4%, followed by Hong Kong (38.3%), the US (15.2%), China (14.7%), and the EU (9.2%). On imports, only the US declined by 13.6%, while Hong Kong surged 44.8%, the UK 28%, China 23%, and the EU 11.4%.
These figures reveal structural shifts: AI-driven electronics and smart hardware demand is positioning Asia (especially China, South Korea, and Taiwan) at the core of trade growth, while US demand contraction and European manufacturing weakness may shrink traditional textile and apparel import space. For textile companies, this implies supply chain strategies should lean toward Asia, while monitoring transshipment hubs like South Korea and Hong Kong.