current
Trade Flows Reconfiguration
Geopolitical shifts and economic factors are driving a diversification of global trade, impacting fashion sourcing strategies.
Timeframe
near-term
Categories
Subcategories
Impact areas
Detailed Analysis
The traditional US-China trade dominance is giving way to a multipolar structure, with countries prioritizing trade with geopolitically aligned partners. This trend is evident across industries, with the US and EU diversifying imports and reducing reliance on China. "Between 2017 and 2023, the share of total US imports from China fell by 5.8 percentage points, with imports in strategic industries such as electronics reducing by more than 20 percent in 2023." This diversification is accelerating in fashion due to rising costs, evolving trade policies, and sustainability targets. "Rising sourcing costs, tariffs and sustainability targets may accelerate sourcing diversification." Fashion brands are responding by diversifying their sourcing footprint in Asia and exploring nearshoring options. "The share of apparel manufacturing foreign direct investment into nearshoring regions has increased 20%points in the last five years for the US and 8%points for the EU."
Context Signals
5x increase in trade barriers since 2015
US apparel imports from China down 6%points
Increased FDI in nearshoring regions
Edge
Emergence of new manufacturing hubs in Africa and Southeast Asia could reshape the fashion landscape.
Brands may leverage technology like blockchain to enhance transparency and traceability in diversified supply chains.
Sustainability considerations could become a deciding factor in sourcing decisions, favoring countries with lower emissions factors.
