Merchandise trade growth, on the global level, exceeded expectations in Q1 2026, as surging trade in electronic components related to the ongoing AI boom offset the negative impact of the Iran war, said the World Trade Organization (WTO) in its quarterly data.
While the global merchandise trade grew 1.9% in the first quarter compared to the previous one and 3.2% compared to the same quarter in 2025, in value terms, the rato was up 2% quarter-on-quarter and 11% year-on-year.
“The pace of year-on-year growth in the first quarter of 2026 was particularly impressive considering that trade in the first quarter of 2025 was boosted by the frontloading of imports in North America ahead of expected tariff hikes. Strong trade in electronic components related to AI outweighed the negative effects of the outbreak of war in the Middle East, including disrupted shipments of goods through the Strait of Hormuz and dampened GDP growth in net fuel-importing countries due to higher energy prices. Figures on world trade in AI-enabling goods are not available in quantity terms, but the US dollar value of this trade was up more than 40% year-on-year in the first quarter,” the WTO noted.
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The WTO’s most recent trade forecast, issued in the Global Trade Outlook and Statistics (GTOS) report from March 2025, predicted 1.9% growth in the volume of world merchandise trade in 2026 under a baseline scenario, less than the 3.2% increase recorded for the first quarter.
While the report estimated that the Iran war could shave 0.5 percentage points off world trade growth in a high energy price scenario, it also saw the continued strong AI-related investment potentially adding 0.5 percentage points to growth.
As per the WTO, these estimates were produced very early in the conflict, with only partial information on the extent of shipping disruptions in the Strait of Hormuz.
“Considering subsequent developments, WTO economists expect to see larger contractions in Middle East trade flows by the end of the year together with stronger growth in Asia and North America. The global impact, meanwhile, will depend on whether it will be the AI boom or the Middle East conflict that predominates,” the global trade body noted.
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The Middle East conflict has impacted the region’s merchandise trade flows. The region’s seasonally adjusted export and import volumes were down 9.7% and 11.9% year-on-year in the first quarter, with larger contractions expected in the second quarter.
The WTO Secretariat estimates, based on available reporting, that the volume of global crude oil imports from the Middle East was down roughly 45% in March. Similarly, imports of Liquefied Natural Gas (LNG) and fertilizers from the region were down 52% and 26%, respectively.
Meanwhile, AI-related investment spending lifted trade volumes in Asia and to a lesser extent in North America in the first quarter. Seasonally adjusted exports and imports of Asia were up 12.9% and 14.6%, respectively, compared with the first quarter of 2025.
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“Asia’s strong year-on-year trade growth was in part attributable to very large quarter-on-quarter increases in both exports and imports in the first quarter of 2026 (5.5% and 7.2%, respectively), with exports driven not only by China but also by Singapore, the Republic of Korea, Thailand and Chinese Taipei. Much of the rise in Asia was due to intra-regional circulation of AI-enabling goods,” the WTO said.
“As for North America, its first quarter exports were up 7.0% year-on-year. North American imports were down 10.7% from the first quarter of 2025, which saw a surge of imports due to frontloading ahead of expected tariff increases. Quarter-on-quarter growth, however, remained strong at 3.4%. A 2.6% year-on-year decline in the volume of Europe’s exports, on the other hand, was also mostly related to frontloading of shipments of gold and pharmaceuticals to North America in the first quarter of last year. European import volume registered a modest 0.6% increase,” it noted further.
“In other regions, quarter-on-quarter export volume growth was moderate to negative in the first quarter (0.3% for South America, -2.5% for Africa, and -7.4% for the CIS region). However, the 22.5% cumulative increase in South America’s exports since the start of 2023 was greater than any region other than Asia (33.4%). South America’s 24.5% cumulative rise on the import side over the same period was also the second largest of any region, this time behind Africa (25.0%). Exports of South America, Africa, and the CIS region are expected to rebound in the second quarter as petroleum producers try to make up for reduced output from the Middle East,” the WTO said.
The value of merchandise exports in Q1 increased the most in Asia, rising 20% year-on-year. As per the WTO, the growth was driven particularly by exports of precious metals and gold, copper, machinery and electrical machinery, and ores, while exports of iron and steel, pharmaceuticals, and clothing dropped.
“Africa saw the second-highest increase, with 14% growth, supported by exports of precious metals and gold, copper, fertilizers, and ores, among others, though cocoa and fuels exports declined. South and Central America also grew by 14%, with increases in exports of oil seeds, precious metals and gold, meat, fuels, ores, coffee, and tea. The region saw declines in exports of fruits, electrical machinery, and vehicles. Only the exports of the Middle East and the Commonwealth of Independent States (CIS) showed declines, both falling by 1%. As the majority of merchandise imports from both regions consists of fuels, this trend correlates with the latest developments in world trade in fuels,” the trade body observed.
On the imports side, strong year-on-year increases were observed for Asia (+22%) and Africa (+15%). Regarding Asia, imports of precious metals/gold, copper, and machinery showed marked increases, while iron and steel imports went slightly down. African imports grew particularly for vehicles, machinery, and ships/boats, while aircraft and organic chemical imports fell.
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“North America’s merchandise imports in the first quarter decreased the most (-7%), with imports of precious metals, pharmaceuticals, vehicles, and articles of iron or steel recording particularly strong contractions. The value of Middle East imports also fell 6% due to a combination of rising prices and falling volumes,” WTO data said.
All the top five exporters in the first quarter of 2026 recorded nominal export growth year-on-year, with the Republic of Korea leading with +38.4%; followed by Hong Kong, China (+38.3%); the United States (+15.2%); and China (+14.7%). The European Union (+9.2%) recorded a modest growth rate.
Of the top five importers, only US merchandise imports declined (-13.6%), while imports of the other four increased in value terms: Hong Kong, China (+44.8%), the United Kingdom (+28.0%), China (+23.0%) and the European Union (+11.4%).