How trade tensions and inflation are affecting the denim industry

In October, the SugarFactory event hall in Amsterdam traditionally turns indigo blue. Denim professionals and lovers gather there for Kingpins, the leading denim trade fair. New innovations and trends are presented here.

At the October issue, the enthusiasm was mixed with concern. How badly are US import tariffs, inflation and cautious consumers affecting the denim industry?

Y2K denim and focus on construction

A first impression of the trade fair confirms that denim, no matter how timeless it may be, always moves with fashion. The same trends were seen on the Kingpins as on the runway. This was evident with brands such as Veronica Beard and Collina Strada, which use denim heavily.

The silhouette remains wide, but becomes a little narrower – think of ‘Cigarette’ models. Designer Sina Steidinger, a loyal visitor to the trade fair, says: “If we move towards slim fit again, then especially from the knee straight down. I don’t see skinny jeans returning any time soon.”

What she also notices: Ecru denim is still omnipresent. The material becomes heavier again and has a clearly visible structure. She’s also seeing a lot of striped denim. This is not created by a print, but by consciously weaving a coarser white thread into the chain, the ‘warp’. “This creates a striped, typical ‘Y2K’ effect,” says Steidinger. In keeping with this trendy era, the manufacturers are also presenting many innovative washes with a lived-in vintage look at the trade fair.

US tariffs

The US import tariffs on textiles and clothing are a result of the trade war between China and the United States under President Donald Trump. They have an impact on the denim industry. The tariffs, the percentage of which varies depending on the country, make production in China significantly more expensive. As a result, many brands are moving their purchasing and production to other Asian countries such as Vietnam, Bangladesh and Pakistan.

Caitac Denim, a Los Angeles-based company that represents Japanese mills such as Kaihara and Yoshiwa, among others, has seen a surge in interest in Japanese denim. Representative Kevin Phu shows two fabrics made by a U.S. mill and a Japanese weaver. Normally the Japanese fabric is almost twice as expensive. However, due to tariffs, this price difference has disappeared. Phu explains: “For a higher quality like Japanese denim, you get a better price relatively speaking. The Japanese fabrics are stronger and have a deeper indigo color than the US ones. We have sold them out for over a year now.”

He adds that Japanese style is currently very popular among fashion brands. “There are only a few machines left that can make really good selvedge denim. Almost all of them are Japanese.” Other manufacturers also confirm the high demand for Japanese denim. Delivery times range from eight weeks to a year and a half. Walter Manfroi from Italian denim manufacturer Blue Men reports that demand is 40 times higher than last year.

Meanwhile, Celine Chen from Advance Denim, a major denim manufacturer in China, confirms the relocation of production to other Asian countries: “Since tariffs in China are higher than in Vietnam, many brands are moving their production there. We are already preparing to move machines to Vietnam.” She adds that in addition to Vietnam, brands are also increasingly focusing on Bangladesh, India, Turkey and Pakistan.

Mansoor Aslam, representative of Pakistan’s Artistic Fabric Mills, notes the difference: “More and more brands are turning to us, especially in the last six months. We couldn’t compete with Chinese prices before, but we can now. Similar to the Corona pandemic, this creates new business opportunities for us.”

Inflation and uncertainty

The financial situation in the fashion industry remains tense. Companies report shrinking profit margins and growing risks in their supply chains. Keith O’Brien, representing Isko, part of the Turkish Sanko Group, at the trade fair, notes: “Both tariffs and inflation are leading to strong price fluctuations and uncertainty throughout the supply chain. Consumers are also feeling this. The cost of living is rising, so they are spending less on consumer goods such as clothing.”

Isko tries to arm itself by controlling all activities – through vertical integration. “Because our parent company is also our yarn and fiber supplier, we can control prices better. At the same time, it makes it easier for us to focus on recycling and setting up take-back systems for brands. In this way, we help them comply with new EU regulations.”

Organic cotton less popular

A notable side effect of financial uncertainty is that manufacturers are seeing declining demand for organic cotton. Gunes Zabun from the Turkish clothing manufacturer Yiltem Konfeksiyon says: “Hardly any brand asks for it anymore. They already have a hard time. They order less and are under price pressure. Organic cotton is more expensive and therefore not popular for the time being. Big brands only include a few items at most for their image because their sustainability guidelines require it.”

According to Zabun, fashion and the environment are in direct contradiction to each other. “It remains a business.” However, she sees potential in increasing efficiency in the factories. These save costs and, in their opinion, are often more effective for sustainability. “Many Turkish manufacturers have made their factories more sustainable in recent years. For example, we use solar energy and recycled water. This saves a huge amount of energy and water.”

Broader criticism of the use of sustainability labels was also voiced at Kingpins. Several stakeholders stated that they doubted the reliability of organic cotton certifications. Alejandro Pérez from the Spanish company Tejidos Royo says: “Many brands claim to sell organic cotton. In reality, only five percent of global cotton production is truly organic. The numbers simply don’t add up.”

Manfroi from Blue Men is also critical. He points out that certification itself has become a large industry. Large companies with hundreds of employees make good money from it. “I recently received a request from a German customer for 44 certificates. If I were to implement all of this, it would cost me 130,000 euros per year. And in the end, the consumers pay the bill. Is that ethical?”