China Redirects Garment Exports to Europe Amid US Tariff Strain

China is rapidly diverting a growing share of its clothing exports towards Europe, as trade tensions and tariffs in the United States force Chinese manufacturers to find new markets. The shift is reshaping global apparel supply chains and intensifying competition for European textile producers already facing sluggish demand and rising costs.

According to customs data, China’s textile and clothing exports to the European Union rose by around 20 per cent in both value and volume during the first half of 2025 compared with the same period last year. That growth translated into roughly €2 billion in additional imports entering the EU much of it in the form of low-cost garments and fast fashion.

At the same time, Chinese exports to the United States have dropped sharply. E-commerce shipments to the US fell by 65 per cent in volume in the first quarter of 2025, while deliveries to Europe rose by approximately 28 per cent, according to logistics and customs data. Between April and May, exports of Chinese textiles and clothing to the US were down about 20 per cent year on year.

Despite weaker demand from America, China’s overall textile and apparel exports remained resilient. The total value reached roughly US$143 billion in the first half of 2025, a slight increase of 0.8 per cent compared with the previous year. While clothing exports fell marginally (-0.2%), textile exports grew by around 1.8 per cent, showing how manufacturers are managing to sustain production by redirecting shipments to Europe.

Europe’s openness and relatively high customs threshold for small parcels, currently €150 have made it easier for Chinese e-commerce platforms such as Shein and Temu to ship goods directly to European consumers without significant duties. However, this same openness is now raising alarm among domestic producers.

The European textile and clothing sector, which generates about €170 billion annually and employs more than 1.3 million people, is warning of mounting pressure from cheaper imports. Producers in Portugal, Italy, and Central and Eastern Europe are particularly exposed, as they compete directly with low-cost Asian goods. Industry representatives have called on Brussels to review import thresholds and consider safeguard mechanisms to ensure fair competition.

Policymakers face a difficult balancing act. While retailers and consumers benefit from cheaper clothing and a broader product range, the surge in imports risks undermining Europe’s manufacturing base. Introducing stronger trade defences could provoke retaliation from Beijing or disrupt supply chains that European brands rely on for production and materials.

China’s pivot towards Europe underscores the fragility of the global trading system amid growing protectionism. As manufacturers adjust to shifting tariff regimes and geopolitical uncertainty, Europe finds itself both a beneficiary and a casualty of global realignment, enjoying affordable imports but facing renewed questions over industrial resilience, labour competitiveness, and the sustainability of its domestic textile industry.

Source: Financial Times