Global merchandise trade delivered a strong headline performance in Q1 2026, but the underlying picture is one of sharp regional divergence. According to the joint monitoring report by the WTO and UNCTAD, seasonally adjusted trade volume rose 3.2% year-on-year, while trade value surged 11%. Yet behind this average lies a gap of nearly 30 percentage points between Asia and the Middle East in import/export growth. Asia, driven by AI-related investment, saw both volumes and values climb sharply, while the Middle East suffered double-digit declines due to geopolitical conflicts. For textile exporters, reading this divergence is more actionable than tracking the aggregate number.
Asia remains the core engine. In Q1, Asian import and export volumes surged 14.6% and 12.9% year-on-year respectively; export value jumped 20% and import value 22%, both leading globally. The driver is not a single market but the coordinated strength of China, South Korea, Singapore, Thailand, and Taiwan in electronics manufacturing and smart hardware supply chains. Cross-border demand for AI chips, smart devices, and supporting equipment continues to expand, boosting intra-regional trade in intermediate and capital goods.
In stark contrast, the Middle East saw import volume fall 9.7% and export volume drop 11.9% year-on-year, with import value down 6% and export value down 1%. Supply chain disruptions and blocked logistics channels are dragging down cargo turnover efficiency, and institutions expect pressure to persist into Q2. Textile exporters relying on Middle Eastern orders need to reassess delivery schedules and payment risks.
North America shows an "export hot, import cold" pattern. Export volume rose 7% year-on-year, but import volume fell 10.7%, and import value was the only decline among major economies at -7%. The base effect from tariff-driven front-loading in 2025 partly explains the import slump, but domestic demand contraction is evident. Europe faces a similar challenge: export volume down 2.6%, import volume up only 0.6%, reflecting weak manufacturing external orders.
Long-term growth potential is accumulating in South America, Africa, and the CIS region. Since early 2023, South America's cumulative export and import growth reached 22.5% and 24.5% respectively—second only to Asia. Africa's cumulative import growth of 25% leads the world. With oil exporters expected to ramp up production to fill the Middle East gap, these resource-rich regions may see export rebounds in Q2. For textile raw material suppliers, this could mean increased demand for fibers and yarns from these regions.
Among major trading economies, South Korea leads export value growth at 38.4%, followed by Hong Kong at 38.3%, the US at 15.2%, and China at 14.7%, while the EU lags at 9.2%. On the import side, Hong Kong surged 44.8%, the UK 28%, China 23%, and the EU 11.4%. This "Asia produces, world consumes" pattern reinforces the weight of electronics supply chains in global trade.
Practical Recommendations
For Buyers - Explore demand for auxiliary textiles linked to the electronics supply chain, such as packaging fabrics and functional filter materials. - Add risk clauses to Middle East orders; prioritize suppliers with stable logistics channels and shorten payment cycles. - Lock in prices for natural fibers like cotton and wool, leveraging the export rebound in South America and Africa.
For Exporters - Rebalance market portfolios: increase focus on fast-growing markets like South Korea and Hong Kong, especially for textiles supporting AI hardware. - Remain cautious on US and EU markets; shift export orders toward Southeast Asia and South Asia to avoid weak demand. - Monitor energy price trends; if oil production increases materialize, position early for reconstruction-related textile demand in the Middle East.
Global trade has entered a phase of structural divergence. As a key segment of intermediate goods trade, the textile industry must follow regional demand shifts and supply chain migrations. Relying solely on traditional markets is no longer viable; flexible positioning is the key to survival in 2026.