The textile industry has always been one of the most globalized sectors, with raw materials often crossing multiple borders before reaching the apparel market. However, in recent years, growing geopolitical uncertainties—most notably the U.S.–China trade war and the Russia–Ukraine conflict—have created unprecedented challenges for textile supply chains. Trade frictions between the U.S. and China have restricted exports of cotton and fabrics, forcing brands to reassess sourcing strategies. Meanwhile, the Russia–Ukraine war has driven up energy and chemical raw material prices, indirectly raising costs for synthetic fibers such as polyester and nylon. Together, these factors are pushing the global textile industry to rethink supply chain resilience and its future trajectory.
The U.S.–China Trade War: Supply Chain Restructuring and Raw Material Frictions
Since 2018, the U.S.–China trade war has had a significant impact on the global textile market. The U.S. imposed tariffs on Chinese imports, including certain textile raw materials and apparel, raising the cost of Chinese exports to the American market. In 2025, the U.S. further escalated tariffs on Chinese goods, causing a sharp decline in Chinese textile and apparel exports to the U.S. According to Reuters, U.S. apparel imports from China in May 2025 dropped to just USD 556 million—the lowest in 22 years. As a result, many American retailers shifted sourcing to Vietnam, Bangladesh, India, and Mexico.
At the same time, the U.S. Congress passed the Uyghur Forced Labor Prevention Act in 2021, banning imports of Xinjiang cotton and related products, while blacklisting multiple Chinese cotton companies. In response, the Chinese government pushed domestic brands to resume the use of Xinjiang cotton and even pressured multinational brands. These tensions have not only reshaped global cotton trade flows but also deepened concerns over supply chain stability.
Chinese companies have responded by promoting domestic raw material substitution to reduce reliance on imports. The government has even required certain cross-border e-commerce platforms not to relocate supply chains overseas but to instead rely on domestic industrial clusters to maintain self-sufficiency. This has created further uncertainty in the global cotton market, compelling international brands to reassess sourcing options and cost structures.
The Russia–Ukraine War: Energy Costs and Logistics Risks
The Russia–Ukraine war, which broke out in 2022, has disrupted the textile raw material market primarily through energy and chemical channels. As a major global exporter of oil and natural gas, Russia’s reduced supply led to soaring energy prices. The European Union’s dependence on Russian natural gas dropped sharply from 40% to 14%. Although U.S. liquefied natural gas (LNG) imports helped alleviate some pressure, long-term uncertainty over energy supply remains.
This has directly affected petrochemical-based fibers such as polyester (PET) and nylon, driving up production costs across the board. Industrial metals such as copper and nickel also surged in price due to the war, indirectly increasing costs for textile machinery and dyeing processes. Meanwhile, Ukraine—formerly a major exporter of flax and hemp—halted exports, leaving Europe with a shortage of natural fibers.
Logistics risks have also intensified. The Black Sea and Azov Sea routes were designated high-risk areas, disrupting container shipping and leading to issues such as delayed letters of credit and cargo refusals. These uncertainties further drove up cotton futures, amplifying instability in global textile trade.
Multiple Impacts on Textile Raw Material Supply
The combined geopolitical shocks have created layered challenges for textile raw material supply:
Cotton market volatility:
With Chinese cotton restricted, U.S. and European brands turned to India and Africa. However, limited production and higher prices led to unstable supply.
Rising synthetic fiber costs:
Elevated energy prices have increased costs for polyester, nylon, and other synthetic fibers, putting pressure on sportswear and functional fabric producers.
Shortages of flax and hemp:
Ukraine’s halted exports left a supply gap in Europe, with Asian markets unable to fully compensate.
Higher dye and auxiliary chemical costs:
Energy and chemical restrictions, combined with China’s tightened environmental policies, created bottlenecks in the dyeing and finishing stages.
Overall, the industry’s cost structure has been hit on multiple fronts, forcing manufacturers to pass on part of the burden to end consumers.
Industry Responses: Diversification and Localization
In response to this unstable market environment, Taiwanese and global textile players are actively adjusting strategies:
Diversified supply chain layouts:
The traditional reliance on a single sourcing region is breaking down. Companies are increasing procurement from Southeast Asia (Vietnam, Indonesia), South Asia (India, Pakistan), and even Africa to reduce risk.
Recycled and alternative materials:
Recycled polyester (rPET), Lyocell, and other innovative materials are emerging as viable alternatives—reducing dependence on conventional raw materials while aligning with ESG and sustainability goals.
Nearshoring and localized production:
European and U.S. brands are relocating parts of their manufacturing and processing closer to home markets, shortening supply chains and reducing transportation and policy risks.
Digitization and transparency in supply chain management:
Brands are implementing blockchain-based traceability systems to ensure legal and transparent sourcing. Governments in Vietnam and India are also promoting supply chain certification to avoid tariff penalties. China, meanwhile, is strengthening domestic cotton and synthetic fiber production and investing in sustainable raw material R&D to enhance self-sufficiency.
Outlook and Conclusion: New Opportunities Amid Risks
While the U.S.–China trade war and the Russia–Ukraine conflict present formidable challenges to the global textile industry, they also open new opportunities. With sustainability and circular economy principles gaining traction, companies that master new material innovation and supply chain management will be best positioned to stand out in the competition.
For Taiwan, although raw material price fluctuations and supply disruptions remain inevitable, its strength in functional textiles and high-value-added products provides a competitive edge. By further integrating sustainability practices with digitalized supply chain management, Taiwanese firms can enhance resilience and potentially find new strategic roles amid global supply chain restructuring.
Ultimately, only by diversifying risks, investing in innovation, and strengthening sustainability strategies can the textile industry continue to move forward in an uncertain geopolitical landscape and secure a stronger position in the new global order.
