Global merchandise trade in Q1 2026 delivered a "strong aggregate but unbalanced structure" picture. Seasonally adjusted, global trade volume rose 3.2% year-on-year and value jumped 11%, but growth was not universal—Asia's import and export volumes surged 14.6% and 12.9%, while the Middle East saw rare double-digit declines of 9.7% and 11.9%. For textile exporters, understanding this divergence matters more than the headline numbers.
Regional Divergence: AI-Driven Asia vs. Conflict-Hit Middle East
Asia's explosive growth is no accident. Cross-border demand for AI chips, smart hardware, and supporting equipment has been released continuously, with China, South Korea, Singapore, Thailand, and Taiwan all seeing synchronized export growth, forming a combined force of diversified manufacturing and electronics supply chains. In Q1, Asia's export value rose 20% and imports 22%, leading globally. This momentum has spilled over to North America—though U.S. import value fell 7%, Asian export strength partially offset weak North American domestic demand.
In contrast, geopolitical conflicts directly suppressed Middle East trade, with supply chain disruptions causing sharp double-digit declines in both import and export volumes, and institutions predict continued pressure in Q2. This reminds textile exporters that order fluctuations in the Middle East may not just be a demand issue but also a reliability concern for logistics and settlement channels, requiring proactive risk planning.
Uneven US and Europe: Shrinking Domestic Demand vs. Weak Manufacturing Exports
North America's export volume rose 7% in Q1, but import volume fell 10.7%, indicating clear domestic demand contraction. U.S. import value dropped 13.6%, the only decline among the top five importing economies, partly due to the high base from tariff-anticipation imports in Q1 2025, but also reflecting weakening consumer momentum. Europe showed an "exports weak, imports slight growth" pattern, with export volume down 2.6% and manufacturing external orders sluggish; EU export value growth was only 9.2%, clearly lagging Asia.
For textile trade, the uneven recovery in traditional US and European markets implies changing order structures: North America may rely more on high-value-added products, while Europe requires deeper cultivation of existing customers. Meanwhile, the long-term growth potential of South America and Africa deserves attention—since early 2023, South America's cumulative exports and imports have grown 22.5% and 24.5%, both ranking second globally; Africa's cumulative imports have grown 25%, ranking first. These regions' demand for basic textiles and home textiles could become new growth points.
Headline Economies: Korea and Hong Kong Lead, China Steady
All top five exporting economies achieved positive growth, but the gap is wide: Korea led with 38.4% year-on-year growth, Hong Kong followed at 38.3%, the U.S. 15.2%, China 14.7%, and the EU only 9.2%. On the import side, Hong Kong surged 44.8%, the UK 28%, China 23%, and the EU 11.4%. China's strong performance on both sides reflects its central role in global supply chains, implying that demand for textile raw materials and equipment may remain active.
Transmission to Textiles and Outlook
This round of trade growth is AI-led, directly boosting electronics trade, but indirect effects are significant: AI infrastructure construction drives demand for industrial textiles (e.g., cable sheathing, filter materials), functional fabrics, and textiles for smart wearables. Textile companies should watch these emerging categories rather than focusing solely on traditional apparel orders.
In Q2, energy supply rebalancing may boost exports from South America, Africa, and the CIS, while the Middle East could see restocking demand if tensions ease. But global tariff policies, geopolitical situations, and consumption recovery paces remain variable. Textile exporters should incorporate regional risks into pricing and delivery management, avoiding over-reliance on single markets.