The industry is entering a period that demands clearer insight and co-ordinated guidance. UKFT’s International Business Director Paul Alger MBE outlines how UKFT can support businesses as they navigate shifting supply chains, rising costs and evolving market pressures.

The fashion and textile sector has always managed complexity but the challenges facing businesses today are unlike anything the industry has seen for decades. At the recent relaunch of FashionSVP, conversations across the show floor revolved around two pressing questions:

• How fragile is the global supply chain?
• How can UK businesses protect themselves when so much lies outside their control?

The impact of US IEEPA tariffs, the end of US De Minimis and escalating protectionism in key markets have coincided with the longer-term challenges of Brexit, rising UK manufacturing costs and a deeply uncertain consumer landscape. The result is a sector where businesses, both large and small, are having to reassess fundamentals they used to take for granted: global sourcing, markets, risk and regulation.

Amid this turbulence, UKFT’s role in helping companies understand, navigate and comply with fast-changing requirements has become more important than ever.

The US tariff shock and its ripple effects

For many UK brands, the US has been the only major market still functioning since Brexit undermined frictionless EU trade. Indeed, the UK, the EU and most other countries are all guilty of putting most of their eggs in the US market, at a time when it was widely expected that the US was looking to change the way it interacts with the rest of the world under its “America First” policy.

Businesses that had refocused on the US market, using both B2C and B2B models and often relying on De Minimis rules, have been disrupted. The effective removal of De Minimis has increased the cost of every shipment, and rapid IEEPA tariffs have added further pressure, unsettling entire supply chains. Some businesses are reconsidering the EU market, but the familiar barriers remain, including market access, compliance, customs and VAT. Most other markets are more difficult to build, requiring more investment than most companies are willing to make.

UKFT recently attended FashionSVP to talk about some of these issues. Companies at the event spoke openly about the effect of these parallel shocks. One profound example was a well-known UK childrenswear brand whose primary Chinese factory shut down suddenly, leaving the brand without stock, without deposits, and without recourse. This was triggered by the destruction of the factory’s US and global-facing order book under the new US tariff environment. This risk is not unique to China as UKFT members which manufacture in India have also found.

These are not isolated incidents. Factories across China, already weakened by a lack of Covid support, are under intense pressure. India, too, faces even higher IEEPA tariffs, with no clear indication of future US trading viability. As a result, brands are preparing for disruption spreading across multiple sourcing countries. Meanwhile, UK manufacturers have also been struggling with additional costs and lack of orders to support their businesses.

“Safe-shoring”: The new language of risk

The industry has long spoken about near-shoring, ally-shoring and on-shoring. Now, another  term has re-entered the mainstream: safe-shoring.

Traditionally used to assess political or structural risk, it now seeks to address which countries are least likely to become sudden targets of US or EU protectionism at the same time as avoiding unstable tariffs.

As a consequence, larger brands are increasingly looking to sourcing in markets such as Morocco or Jordan as “safer” alternatives for US-bound goods, while also knowing that even these routes could shift without notice. In the past year, UKFT has started to work with members looking to source in Morocco and Jordan. We have visited Ethiopia, Egypt, Turkey and others at the same time as maintaining links with key Embassies for Italy, Spain and Portugal, and staying in touch, very importantly, with UK manufacturers. Our aim in this is to support members where we can to source according to their needs.

China, having anticipated tariff conflict, has spent years investing in production outside its borders (Vietnam, Cambodia, Central Asia), leaving domestic factories doubly vulnerable: exposed to tariff shocks and to reduced central support. Traditionally, the early signs of trouble happen after Chinese New Year when workers decide not to return to the cities but this year we could be seeing this happen much earlier.

Challenges for UK manufacturing

As global sourcing becomes more precarious, on-shoring should theoretically offer stability but UK manufacturers themselves are facing the harshest environment in over a decade:

• Continued Brexit fallout and the relocation of production into the EU;
• Rising utilities, labour and tax costs;
• The recent National Insurance increase, described widely as a “tax on jobs”;
• Lost US demand due to IEEPA and De Minimis removal;
• Intense competitive pressure from countries gaining preferential access through trade agreements with the upcoming India trade agreement very much in people’s minds

Many UK CMT units and knitwear factories are operating below capacity, some are taking on training work to survive, or even considering relocation overseas.

Lack of business to the EU and further afield is the most often quoted issue. Retailers and consumers generally say they would like to buy goods which are ethically and sustainably sourced in the UK but they claim not to be able to afford to, preferring to opt for cheaper (often less ethically sourced) alternatives shipped from halfway around the world. Pricepoint resistance is not unique to the UK. Recently Shein opened the first of its new stores in Paris. Once the costs of retail and also the additional costs of customs duty and VAT were added to the goods, many regular customers balked at the higher prices compared with those they have paid hitherto online. Read the Reuters article here.

So if we accept these reactions to prices on cheaper imported goods, the buying habits of consumers for more expensive goods out of the UK and EU show a market in some distress with many talking about the K-shaped economy.

Sluggish UK sales coupled with the dramatic slowing of sales to traditionally stronger markets such as the US and the EU have led even some proud and longstanding UK manufacturing companies to pause investment and rethink the viability of UK production beyond 2026 as well as how to pass on the additional costs from the NI increase and other costs to their global consumer.

This decline threatens not only jobs but also the future of UK creativity, as flexible local manufacturing is essential for designers, start-ups and innovation.

Conversely, “safe-shoring” offers the UK manufacturing industry an added benefit. In times of crisis, UK manufacturing offers the prospect of flexible just-in-time manufacturing to support smaller brands and innovation but for this to happen at scale the industry needs support from government on a level we have not seen before. UKFT still sees interest from key export markets for goods made in the UK but our frustration remains the lack of government policy to support and encourage it.

How can UK businesses protect themselves from global supply chain turbulence?

Companies cannot influence US trade decisions, nor the structure of post-Brexit UK–EU relations. Protectionism is rising globally. Domestic demand is sluggish. With the exceptions of Japan, Korea and the Middle East, many markets are either inaccessible, unstable, unprofitable or unable to absorb higher-priced UK goods.

Companies choosing to manufacture further from home can potentially benefit from lower unit prices but they usually have to commit to larger orders, compromise in some cases on ethical sourcing, trust others to handle their compliance and contribute to greater carbon emissions either in the production process or when the goods are shipped around the world.

Some useful strategies:

• Map and stress-test their supply chain risk across countries where there is the risk of volatile or changing tariffs according to where the goods are being sold with reference to the politics and countries of the goods are being produced;
• Diversify sourcing countries:even small volumes can mitigate supply shocks and spreading the risk across more than one country definitely makes sense
• Consider UK manufacturing for smaller just-in-time orders to ensure that the UK supply chain remains to support innovation and newer brands – this requires thinking beyond the drive to make things cheaply! It’s an investment in our collective future!
• Review market exposure, especially excessive reliance on one or two markets, such as the US, EU or Japan. Invest time and energy in other markets
• Strengthen compliance systems to anticipate documentation and regulatory change
• Seek expert guidance to understand new rules before they become business-critical.

And this is where UKFT’s role is pivotal.

How UKFT can help: Compliance, clarity and strategic support

With supply chains strained and regulation shifting rapidly, businesses increasingly need trusted, expert-led guidance. UKFT is uniquely positioned to provide this, acting as the sector’s guardian, advocate and partner.

Here’s how UKFT can support companies right now:

Helping businesses understand their global compliance obligations

The regulatory environment is evolving faster than many SMEs can track. UKFT helps companies:

• Understand EU, US and global compliance requirements, including tariff classifications, product documentation, and new restrictions;
• Navigate EU rules of origin, labelling, sustainability and customs complexities;
• Prepare for upcoming changes in UK and global regulation, from product safety to extended producer responsibility (EPR);
• Identify compliance risks within their supply chain (e.g., forced labour, traceability, due-diligence obligations).
• Warning companies about other risks and potential scams, such as companies miss-selling products around DPP

This guidance is essential for preventing costly errors, shipment delays, or non-compliant sourcing.

Supply-chain risk assessment and planning

UKFT can support businesses by helping them:

• Analyse the stability of sourcing countries under shifting trade policies;
• Understand where “safe-shoring” might be appropriate;
• Evaluate alternative sourcing routes;
• Assess the resilience of critical suppliers;
• Stay informed about new trade agreements and their real-world implications.

UKFT has also undertaken a number of sourcing trips and has relationships with key contacts with Embassies, Consulates and other trade bodies who can help members to find the goods they are looking to source.

For many companies, especially SMEs, this insight is especially important.

Export and market development support

Even in a constrained global market, opportunities exist for well-prepared brands. UKFT helps companies:

• Access buyers in target markets through trade shows and missions;
• Navigate trade barriers and customs documentation;
• Interpret the practical implications of new or changing trade agreements;
• Develop global logistics solutions to maximise profit

Policy advocacy and industry representation

Many businesses feel they are not being heard by policymakers. On behalf of the industry UKFT is in regular contact with the UK government to campaign on key issues of importance:

• Regularly engaging with government departments on behalf of the industry to ensure that Ministers and policy-makers are aware of the importance and views of the industry;
• Highlighting the consequences of tariffs, tax changes and trade policy in a world where more of our global trade partners are becoming protectionist;
• Pushing for support measures for UK manufacturing, skills development and exports and calling for a fairer tax system for UK manufacturers and brick-and-mortar retailers
• Ensuring that government understands the opportunities of exporting for the fashion and textile sector and the need for financial support to get UK brands in front of buyers and decision-makers;
• Campaigning for access to UK and especially UK SME companies for UK public procurement contracts especially in textiles and technical textiles for healthcare and defence;
• Supporting government on trade agreements especially where these align with industry priorities or conflicts of interest;
• Encouraging a better trading environment between the UK and the EU (our closest near-shore supply chain and market) as well as a better understanding of the opportunities and challenges of the UK’s new trade agreements – especially the challenges around the UK-India agreement which is expected to come into effect in Q3 2026;
• Encouraging the UK to join the Pan Euramed Agreement (PEM)
• Calling for a UK VAT refund scheme to encourage wealthy international travellers to shop in the UK

While the UK policy environment remains challenging, UKFT ensures the industry’s voice is neither isolated nor ignored.

Practical tools and training

UKFT provides:

• Workshops on compliance, exporting, and supply-chain resilience;
• Guidance documents on new regulations;
• One-to-one support for businesses facing immediate challenges;
• Connections to trusted suppliers, service providers and experts.

In a world where misinformation and guesswork are expensive, UKFT offers clarity.

Our industry is at a turning point

The fashion and textile industry is grappling with unprecedented pressures: tariff shocks, factory closures, a shaken manufacturing base, and a global turn toward protectionism. Many businesses feel exhausted by uncertainty and frustrated by a lack of meaningful policy support.

But the situation is not hopeless. There is expertise, infrastructure and advocacy available if companies take steps now to understand their risk and strengthen their compliance and sourcing strategies.

UKFT is ready to support the industry through this turbulent period, helping businesses stay informed, compliant, competitive and resilient.

Get in touch

Are you a UKFT member? Contact info@ukft.org with your questions or issues you need help with.

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