Global merchandise trade posted gains in both volume and value in Q1 2026, but the growth is far from universal. According to the joint monitoring report by the WTO and UNCTAD, trade volume rose 3.2% YoY and value surged 11% YoY. Yet the Middle East saw imports and exports fall 9.7% and 11.9% respectively, while North American import value dropped 7%—the steepest decline among major regions. This picture of simultaneous growth and contraction suggests that the order map for textile foreign trade is being redrawn.
Regional divergence: AI engine vs. geopolitical fault lines
Asia is the biggest winner. Export volume jumped 12.9% YoY, imports rose 14.6%, and export value soared 20%—the fastest globally. China, South Korea, Singapore, Thailand, and Taiwan all contributed, driven by AI chips, smart hardware, and related equipment. For textiles, this means demand for industrial textiles, functional fabrics, and packaging materials linked to electronics may rise, but traditional apparel orders may not share the dividend.
The Middle East's contraction directly impacts textile exports. Import volume fell 9.7%, and import value dropped 6% due to price volatility. Geopolitical conflicts are blocking logistics, reducing supply chain efficiency, and pressure is expected to persist in Q2. Exporters relying on this region face longer payment cycles, higher freight costs, and potential order cancellations.
Europe and North America show mixed signs. North American exports rose 7% but imports fell 10.7%—a clear sign of weakening domestic demand. Europe's exports dropped 2.6% while imports edged up 0.6%, reflecting soft external orders. For textile trade, restocking demand in traditional Western markets may be weaker than expected, especially as North American apparel retailers lean toward nearshoring.
Value-based winners and losers
In value terms, Asia's export value rose 20%, Africa and South America each gained 14%, while the Middle East and CIS slipped 1%. On the import side, Asia grew 22%, Africa 15%, and North America fell 7%. This suggests resource-rich regions are suffering from energy price swings, while manufacturing hubs benefit from AI investment.
Among major economies, South Korea led exports with 38.4% growth, followed by Hong Kong at 38.3%, the US at 15.2%, China at 14.7%, and the EU at a slower 9.2%. On imports, Hong Kong surged 44.8%, the UK 28%, China 23%, and the EU 11.4%, while the US contracted 13.6%. For textile firms, Korea and Hong Kong's strong numbers signal active transshipment and mid-to-high-end fabric demand, while the US decline warrants caution.
Notably, Africa's cumulative import growth of 25% ranks first globally, and South America's cumulative import and export growth of 24.5% and 22.5% are second only to Asia. This points to emerging markets—especially African apparel consumption and South American industrial textile demand—as the next battleground.
Practical recommendations
For buyers - Rebalance sourcing weights: Asia (especially China and Korea) offers stable supply chains, but watch for new demand in AI-related electronic companion fabrics and secure suppliers early. - Hedge Middle East risks: increase down payment ratios or purchase credit insurance for orders, and evaluate alternative logistics routes (e.g., via the Cape of Good Hope). - Focus on South America and Africa: their import growth is leading; consider local warehousing or partnerships to seize first-mover advantages.
For exporters - Upgrade product mix: capitalize on the AI spillover by developing anti-static, conductive, and heat-resistant functional fabrics to serve electronics manufacturers. - Diversify markets: reduce reliance on North America and Europe; prioritize Africa and South America to build brand presence during their import growth window. - Monitor geopolitical risks: establish early-warning mechanisms for high-risk regions like the Middle East and CIS, regularly assess exchange rates and logistics costs, and adjust pricing flexibly.
Global trade in 2026 has entered a phase of structural divergence, with AI dividends and geopolitical risks coexisting. Textile enterprises must accurately grasp regional dynamics to find growth anchors amid volatility.