China’s Fashion Playbook: Wooing Europe with Price Cuts and Strategic Appeals

“Chinese companies have taken a kind of air bridge to Europe and are here all day long”. This is how the sourcing director of a Spanish fashion company puts it, explaining with facts what the macro data are already beginning to show. With the closing of the U.S. doors to Chinese fashion, China, the world’s factory, has increased its sales to Europe, seeking to make up for the fall in exports to the United States with the EU market. Tariffs redraw the map of global sourcing, both for the country governed by Donald Trump and for the rest of the world, which is experiencing the indirect consequences of U.S. trade policy.

In recent months, according to various sources in the sector, the major Chinese clothing manufacturers have been open to lowering prices and adjusting times in order to win orders in Europe, even going so far as to backdate orders by assuming costs, i.e. accepting the cancellation of orders from European companies without penalty.

Overall, from January to August of this year, Chinese exports of manufactured goods to the United States reached a value of $12.788 billion, according to data published by the General Administration of Customs of the People’s Republic of China (Gacc). The figure falls by 5.54% compared to the same period a year ago, when global trade had not yet been affected by Trump’s arrival in the White House.

The decline in Chinese sales of ready-made fashion to the United States has been across the board in almost every month of the year. The only exceptions are, in fact, January and March, when exports from the Asian giant to the Yankee power increased by 27.5% and 25.7%, respectively. This rise is explained by the precautionary sourcing carried out by many US companies both in the first month of the year, when Trump officially took office with promises to shake up relations between the two powers, and in March, the month prior to Liberation Day.

The biggest drop was precisely that noted in August, with sales of ready-made garments worth $1.906 billion, down 24.7% from the same month in 2024. Similar was the drop in February, of another 21.8% and exports for 775.5 million dollars, or April and May, of another 13.11% and 11.25% less, respectively. In the absence of data for September, the GACC announced last week that its combined exports had closed the ninth month of the year on the rise despite the generalized fall in its sales to the United States and thanks, precisely, to its greater trade intensity with other territories.

With the United States off the map, and its main customer in question, Chinese fashion has diverted its exports to the second most mature market in terms of consumption: Europe. Just as Chinese sales of ready-to-wear fashion are falling to the US giant, the Asian country has increased its exports of the same items to the EU-27 as a whole by 8%.

According to the same Gacc data, Chinese sales to the European Union from January to August stood at $10.537 billion, up from $9.758 billion a year ago. “In China, the decline in exports to the United States has been offset by a rise in sales to the euro zone and other Southeast Asian countries,“ confirms the latest International Monetary Fund (IMF) report, published last week.

Of the eight months with available data, the sector has thus accumulated six months in positive territory, with declines only in February, up 34.7%, and August, a slight 0.73% year-on-year. However, the majority trend has been upward, which has more than offset the slump recorded at the beginning of the year.

Sales from the Asian giant to the EU-27 began the year already on the rise, with a 16.2% increase in January, or 1,256 million dollars, followed by another 16.9% rise in March, to 721.7 million dollars. Exports rose the most in April and May, by 27% and 28%, respectively, a trend that eased in June (7.6%) and July (2.9%).

Textiles seek their own way out

Along with the fall in Chinese exports of ready-made garments, textile exports have also been falling, in this case to both the United States and the European Union. Specifically, GACC data put its textile exports to the United States at $170.3 million, compared to $221.1 million a year ago.

As for the EU-27 as a whole, the value of Chinese textile exports up to August reached $574.6 million, 4.5% less than in the same period of the previous year.

If China is looking to Europe for an outlet for the finished garment, data from the Asian giant’s office suggest that the raw material, i.e. the textile, is looking for its own outlet to other producing countries such as Vietnam or Cambodia, which, although also subject to tariffs, are well below the U.S. levy on China.

In many cases, moreover, the factories in these countries are often owned by Chinese nationals, who, in view of the rising production costs in their country in recent years (mainly due to professionalization and rising living standards), have diversified their own production to neighboring countries.