Global merchandise trade kept expanding in Q1 2026, but the recovery is severely diluted by regional divergence: Asia's export value jumped 20% year-on-year, while the Middle East saw double-digit volume declines and North America's import value shrank 7%. For textile foreign trade, this means the old playbook of "betting on the US/Europe and juggling the Middle East" is losing effectiveness; market priorities need to be recalibrated against new coordinates.
Structural signals beneath the data
According to the joint WTO-UNCTAD monitoring report, global merchandise trade volume rose 1.9% quarter-on-quarter and 3.2% year-on-year, while trade value grew 11% YoY. On the surface, it's a broad uptick, but beneath it, growth is almost single-handedly driven by Asia: export volume +12.9% YoY, import volume +14.6%, and export value +20% leading the world. This is fueled by the AI supply chain boom—chips, smart hardware, and supporting equipment cross-border demand surged, with China, South Korea, Singapore, Thailand, and Taiwan forming an export synergy.
For the textile industry, the AI sector itself does not directly buy fabrics, but its spillover demand for electronics manufacturing, packaging, workwear, and cleanroom garments, along with rising purchasing power of workers in related industrial belts, is indirectly redirecting textile orders. More importantly, higher intra-Asian trade activity means textile exporting countries like Bangladesh, Vietnam, and India may deepen their reliance on Asian markets.
Regional cooling: Middle East collapse, Western weakness, resource-rich rebound
The Middle East was the biggest drag in Q1: imports volume -9.7%, exports volume -11.9%, and import value -6%, mainly due to geopolitical conflicts and supply chain disruptions. The region has long been a key transshipment market for textiles and home textiles; now, blocked logistics extend lead times and raise risk premiums significantly.
The US and Europe also underperformed: North America export volume +7% but import volume -10.7%, import value -7% (the largest drop among major regions); Europe export volume -2.6%, import volume only +0.6%. Shrinking Western demand directly pressures textile exporters reliant on those markets.
Long-term potential lies in South America and Africa: since early 2023, South America's cumulative exports +22.5% and imports +24.5%; Africa's cumulative imports +25%. Despite short-term volatility, institutions predict Q2 rebound for South America, Africa, and the CIS as oil exporters ramp up output to fill the Middle East gap. For textile trade, improved forex earnings in these resource-rich regions will translate into higher import capacity for textiles.
Divergence among major economies and order transmission
Among major economies, Q1 export growth leaders were South Korea (38.4%) and Hong Kong (38.3%), followed by the US (15.2%) and China (14.7%), with the EU lagging at 9.2%. On the import side, Hong Kong +44.8%, China +23%, UK +28%, while the US -13.6%. This divergence implies that exporters heavily reliant on the US should brace for order contraction, while those targeting Asian transshipment hubs (e.g., Hong Kong) and the UK may see gains.
For China's textile sector, a 23% rise in imports signals domestic demand resilience, but export growth of 14.7% below Asia's average suggests that while AI-related products surge, traditional textile exports need new growth drivers.