Security, resilience and geo-diversity are three key things that Australian fashion retailers must keep in mind when navigating global trade upheavals.
This is according to Global Sourcing Expo organiser Julie Holt, who claims the local fashion industry is facing significant transformation ahead.
Factors such as supply chain disruptions, geopolitical tensions and economic uncertainties have highlighted the need for increased collaboration, she added, and as a result, local businesses are adapting their sourcing and operational strategies to keep pace.
This comes amid a rollout of tariffs by United States President Donald Trump on nations across the globe, including Australia. This includes a flat tariff across all goods coming to the US from the United Kingdom and the European Union of 10 per cent and 20 per cent respectively.
Another new tariff being signed in is on goods from Vietnam of 46 per cent, which could soon raise costs for apparel brands in Australia which sell to America.
Other notable tariffs include a 37 per cent tariff on all Bangladeshi imports, and a 27 per cent tariff hike for all India imports.
Meanwhile, Trump has also revealed a 34 per cent tariff hike on almost all Chinese imports, which is reportedly on top of an existing 20 per cent tariff, bringing total duties to at least 54 per cent.
Nearly 60 per cent of clothing sold in Australia is made in China, according to Fibre2Fashion's market insight tool TexPro, which also confirmed that Australia imported apparel worth $2.11 billion during January-March 2024. Of this, the country’s imports from China were valued at $1.25 billion, constituting 59.12 per cent of the total apparel imports.
Vietnam is another prominent country where local brands and retailers produce clothes in, with some estimates claiming it could be around 4 per cent of Australia's global apparel imports.
Other notable countries that Australia imports clothing from include Bangladesh and India, with Bangladeshi apparel imports believed to amount to around 12 per cent of all global apparel imports into Australia, with India believed to be about 5 per cent, all according to various sources.
Then there is the 10 per cent flat tariff on all Australian imports to the US, which the Australian Fashion Council claims will have a major impact on the local fashion and textile industry.
"For brands and designers exporting directly to the US, this will mean increased costs for consumers and business, pricing pressures, and potential disruptions to retail and wholesale partnerships," the AFC wrote on LinkedIn.
"Beyond direct exports, many Australian fashion brands manufacture offshore in key markets such as China and Vietnam, where tariffs of up to 46 per cent could lead to increased production costs, creating further supply chain challenges. Our industry is already navigating economic pressures, and these new complex barriers have the potential to undermine our competitiveness both locally and globally."
The AFC added it is advocating for policies that protect and strengthen the fashion and textile industry.
"We will continue to work with our members, our industry and the government to push for solutions that keep Australian fashion globally competitive, and we encourage any members or concerned parties to reach out if you have any questions."
According to Holt, global trade policies, such as US tariff increases on key apparel-producing nations, will create a more complex trading environment.
However, she said Australia stands out as a favourable destination for international suppliers due to its low or non-existent apparel tariffs.
“As one of the world’s largest fashion consumers relative to GDP, Australia remains a key market for finished goods and co-manufacturing opportunities,” Holt said, who is also the director of International Expo Group.
“Australian fashion brands must develop (and further enhance) flexible supply chains to withstand disruptions such as factory closures, shipping delays, geopolitical influences and raw material shortages."
According to Holt, the over-reliance on a single region for production exposes fashion brands to significant risks.
“This is where geo-diversification comes in,” Holt said, adding that the sourcing of materials and production from multiple regions goes a long way to mitigating risks and ensuring business continuity."
Expanding sourcing and manufacturing across Southeast Asia, Europe and domestic operations could enhance supply chain security.
“Diversified suppliers allow brands to respond quickly to disruptions and maintain operations even when one source is impacted.”
Beyond risk mitigation, geo-diversity fosters innovation, Holt added. Exposure to diverse design influences, sustainable materials and cutting-edge manufacturing techniques keeps Australian brands competitive.
“A broad sourcing network supports a dynamic and adaptive business model in an unpredictable global landscape.”
Holt’s comments come ahead of her annual Global Sourcing Expo event, which runs in Sydney from June 17 to 19, 2025.
Holt said the expo enables industry leaders to assess risks and opportunities in global sourcing, facilitating valuable connections with suppliers and stakeholders.
“With the rapid growth of smaller retailers and eCommerce businesses in Australia, the expo offers a valuable opportunity to connect with a diverse range of international suppliers and learn more about global supply chains,” she said.
“The industry continues to evolve, and we are proud to be at the forefront, leading the conversation and creating a platform that allows key players to connect, innovate and problem solve.”