The textile, apparel, and fashion industries are subject to the combined impacts of consumer sentiment, exchange rates, supply chains, and regulations (ESG/EPR).
Amidst recovering demand for fast fashion and short-cycle reorders, the shift in sourcing to Korea, ASEAN, India, and Bangladesh is accelerating due to diversification of China risk. B2B demand for high-value-added knitwear/functional materials, athleisure, and workwear/uniforms remains robust.
Risk factors | 2025-2026 Outlook | Influence (1~5) | Implications |
|---|---|---|---|
| Consumer sentiment/inventory | gradual normalization | 3 | Short lead times and on-demand production are important. |
| Sourcing diversification | China → ASEAN/South Asia transition | 5 | Cumulative use of RCEP and bilateral FTAs |
| Labor, Ethics, and ESG | Due diligence obligations and wage increases | 4 | Audit, Traceability, and Supply Chain Contract Standardization |
| EPR/Circular Economy | Expanded recycling and labeling obligations | 4 | r-yarn, modular design, and fiber passport compliance |
| Exchange rates and fares | Moderate volatility | 2 | Optimizing shipping and insurance conditions |
Clothing (HS61/62) benefits significantly from reduced tariff rates in major markets . In practice, however, PSR (tariff change, RVC), processing process assessment , and yarn/fabric origin tracking are key bottlenecks.
For fabrics and knitwear (HS54-60), HS and PSR levels vary depending on functionality and blending ratio, making advance assessment crucial.
division | FTA applicability (trend) | Major challenges | Management Points |
|---|---|---|---|
| Finished clothing products (HS61/62) | Generally, the transition from high rate to low rate/tariff-free is felt. | PSR (CTH/RVC)·Fair judgment | Matching country of origin of sewing, yarn/fabric |
| Knit/crocheted fabric (HS60) | Varies depending on mixing ratio and functionality | Functional processing evidence | Test report/processing process diagram |
| Fabrics and yarns (HS54~59) | MFN deviation exists | HS subclassification/blending ratio | Raw material CO·Spec sheet |
| Accessories (HS6212, etc.) | Medium tariff effect | Origin of raw materials | BOM·RVC automatic tracking |
While the US, EU, and UK are significantly benefiting from the agreement's tariff reductions, rules of origin, labeling, testing, and human rights due diligence remain substantial barriers.
ASEAN and South Asia face significant variance in certification and customs procedures , and the regional accumulation of RCEP and bilateral FTAs impacts cost competitiveness.
market | Representative items | MFN (trend) | When FTA is applied | Non-tariff barriers (example) | Comments |
|---|---|---|---|---|---|
| USA | T-shirts, pants, and outerwear | Medium and high rates | Low-rate/tariff-free expansion | Labeling, Safety, Pediatrics, and CBP Inspection | Fiber agreements and order lead times are important. |
| EU | Knitwear, dresses, and shirts | Medium rate | Wide-ranging cuts | Textile Passport·REACH·EPR | Trends in strengthening chemical substances and labeling |
| uk | Knitwear/Men's Clothing | Medium rate | Inha | UKCA·Labeling Regulations | Similar to the EU, but with separate procedures |
| japan | Knitting/Materials | Medium and low rates | Widespread cuts | JIS·Label·Shape Safety | High demands on quality and durability |
| ASEAN/India | Yarn, fabric, and clothing | Medium rate | RCEP/Bilateral Reduction | Discrepancies in certificate of origin and customs clearance | Great cumulative effect |
Note: Actual tax rates and requirements vary depending on HS, blending ratio, and processing process, so prior HTS/PSR determination is recommended.
Although not directly subject to CBAM, Extended Producer Responsibility (EPR) , Textile Passport (digital product passport) , and chemical regulations (e.g., REACH) are expanding.
Recycled fibers (r-PET, r-nylon), bio-based yarns, non-toxic dyeing and processing, and energy-saving processes are emerging as supply requirements.
System/Issue | Core requirements | Influence (1~5) | react |
|---|---|---|---|
| EPR (clothing) | Recovery/Recycling Targets/Fees | 5 | Reverse recovery network and r-material usage rate management |
| Textile Passport | Data digitization of materials, chemicals, and repair information | 4 | Digital label, QR, and PLM integration |
| Chemical substance regulations | Prohibition, Restriction, and Test Documents | 4 | ZDHC·MRSL·Test Registry |
| Labor and Human Rights Inspection | Management of audit, wages, and night work | 4 | Supplier Code/Third-Party Audit |
Korea: R&D on high-performance knitwear, technical fabrics, and smart textiles, and a small-quantity, multi-variety sampling hub.
Vietnam/Indonesia/Cambodia: Maximize tariff savings through bulk garment and packaging sourcing and RCEP accumulation .
India/Bangladesh: Cotton and fabric-based casual wear, competitively priced (quality and delivery management required)
EU/US Local: Small-batch production, digital printing, repair, and refurbishment for custom/reorders
Combining news and consumer sentiment (α), global sentiment (β), and sector sentiment (λ). Signals of gradual improvement due to inventory normalization, recovery in reorders, and the cumulative effects of the RCEP .
variable | Δ(%) or exponent | analysis |
|---|---|---|
| ΔExport_now | +2.1 | Driving demand for knitwear, athleisure, and uniforms |
| ΔImport_now | +1.4 | Reinforcement of yarn, auxiliary materials, and functional fabrics |
| ΔPrice_now | +0.3 | Reflecting the premium of functionality and eco-friendliness |
| ΔSignal_now | +0.026 | Consumer sentiment and reorder recovery |
| ΔFTAEffect | +0.31 | Tariff gap + regional cumulative effect |
| Forecast_3M | +0.47 | 3-month gradual rise forecast |
Formula (summary): Forecast_3M = 0.5·ΔSignal + 0.3·ΔFTAEffect + 0.2·ΔPrice
field | Suggestion | Executor | Expected effect |
|---|---|---|---|
| Country of Origin/PSR | PSR Guide/Judgment Service by Sewing and Processing Process | Korea Customs Service and KOTRA | Reduce the risk of rejection and collection |
| EPR·Circular Economy | Recovery and Recycling Infrastructure Incentives | Ministry of Environment/Local Government | Premium/Bidding Competitiveness |
| Digital Passport | Support for DPP standard, QR, and PLM integration | Ministry of Trade, Industry and Energy and Trade Association | Meeting delivery requirements and brand trust |
| Human Rights and Ethics | Supply Chain Due Diligence Vouchers and Training | Ministry of Employment and Labor and Ministry of SMEs and Startups | Strengthening buyer audit response capabilities |
| Smart manufacturing | Small-quantity, multi-variety, on-demand infrastructure | Local Government/Innovation Center | Reduce lead time and inventory costs |
The effectiveness of FTAs in textiles, clothing, and fashion is the sum of tariff reduction + PSR compliance + EPR/chemical/human rights regulation response .
Forecast_3M: +0.47 — A gradual rise centered on knitwear, functional apparel, uniforms, and B2B.
Recommended strategies: ① RCEP cumulative and multi-source sourcing ② DPP and EPR preemptive response ③ ZDHC and testing registry ④ Digital on-demand production/reorder system.
