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How Fashion Is Shaking Up Its Global Sourcing Strategies

Rising costs, evolving trade policies and shifting political winds are pushing brands to diversify their sourcing in Asia and laying the foundations for more manufacturing closer to home, as detailed in the BoF-McKinsey State of Fashion 2025.
Cover of Trade Reconfigured
Shipping costs have drastically increased across Asia-to-US shipping routes. (Golero/Getty Images)
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Key insights

  • Trade barriers and supply disruptions have increased 5x since 2015, with around 3,000 trade restrictions imposed in 2023.
  • US apparel and textile imports are diversifying away from China at the fastest rate since 2010, falling 6 percentage points from 2019 to 2023.
  • Foreign direct investment into apparel manufacturing in nearshoring regions for the US and Europe has grown significantly in the past five years.

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Up until the early 2020s, global trade revolved around the relationship between the US and China. In recent years, geopolitical tensions and market shifts, coupled with a change in sourcing economics, have caused a shift in this dynamic, resulting in a “multi-polar” structure where more countries participate in global trade.

Further Reading

The State of Fashion 2025: Challenges at Every Turn

The ninth annual State of Fashion report by McKinsey & Company and BoF Insights, The Business of Fashion’s data and advisory team, reveals that economic and geopolitical challenges, combined with shifts in customer values, will define a turbulent year ahead. Download the full report to understand the 10 themes that will shape the industry and the opportunities for growth in 2025.

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