Global merchandise trade in Q1 2026 delivered a mixed picture: total volume rose 3.2% year-on-year and value surged 11%, but growth was almost solely driven by Asia, where export value jumped 20%. Meanwhile, the Middle East saw both volumes and values fall, and North American imports contracted 7%. For textile exporters, the question is no longer whether trade is growing, but where to pivot as regional demand diverges sharply.
Regional Divergence: AI lifts Asia, geopolitics sinks Middle East
Asia's outperformance is no accident. Export volume grew 12.9% and imports 14.6% in Q1, with strong monthly momentum. China, South Korea, Singapore, Thailand, and Taiwan have formed a multi-manufacturing synergy, with cross-border demand for AI chips, smart hardware, and supporting equipment fueling trade. This means textile sourcing logic is being reshaped by the tech industry: rising income of electronics workers boosts apparel demand, while smart wearables increase need for functional fabrics.
The Middle East was the biggest loser. Geopolitical conflicts cut import volume by 9.7% and exports by 11.9%, with trade values also shrinking. Supply chain disruptions not only depress current figures but also cloud Q2 outlook. For exporters relying on Middle Eastern markets for home textiles and garments, this is a warning: longer lead times, volatile exchange rates, and squeezed margins.
North America and Europe: lukewarm, while emerging markets show promise
North America shows a scissors effect: export volume up 7% but imports down 10.7%, and import value down 7%—the steepest drop among major regions. This reflects weakening domestic demand and tariff anticipation. Europe is stuck in a stagflation-like pattern: exports down 2.6%, imports up only 0.6%, with weak manufacturing orders. For textile traders, traditional Western orders will not return to pre-pandemic levels; small-batch, fast-turnover orders will become the norm.
In contrast, South America and Africa offer long-term potential. Since early 2023, South America's cumulative export growth is 22.5% and imports 24.5%, both second only to Asia; Africa's import growth of 25% leads the world. Though Q1 exports dipped in these regions (Africa -2.5%, CIS -7.4%), industry expects a rebound in Q2 as oil exporters ramp up to fill Middle East supply gaps. Textile firms should pre-position in Latin America and Africa, focusing on mid-to-low-end garments and basic home textiles.
Top economies: Korea leads, China steady
Among major traders, South Korea's export value surged 38.4%, Hong Kong 38.3%, the US and China grew 15.2% and 14.7%, while the EU only managed 9.2%. On the import side, Hong Kong soared 44.8%, UK 28%, China 23%, EU 11.4%, while US imports fell 13.6%. These figures reveal an accelerating intra-Asian trade loop, with China solidifying its role as a dual hub for intermediate and consumer goods. For textile firms, this means more transshipment opportunities in Southeast Asia and Central Asia, but also more complexity in rules of origin and tariffs.