During the Global Fashion Summit’s session titled ‘Tariffs, Timelines and Transitions’ the senior director of sustainability at the American, Footwear and Apparel Association (AAFA), Chelsea Murtha explains the decision makers in Washington care about US jobs and US consumers.

She reveals her organisation is telling the US administration that tariffs are leading to price rises and fashion companies are struggling.

She admits the impact of the tariffs are less salient in the broader international community but they do exist so the work the AAFA carries out is connected to global trade relationships.

She asserts: “I think we’re starting to see the administration take some of this in.

Plus, she notes Trump made some comments last month to suggest he’s not “that interested in bringing back apparel manufacturing jobs to the US”.

Crucially, she says the AAFA is telling the administration there are opportunities for US fashion jobs related to sustainability, extended producer responsibility and circularity.

These jobs include sorting, collection and take-back and are positions that she says will need to be filled in the US, so these are things “we want to talk more to the administration about”.

Murtha explains tackling forced labour in the fashion supply chain will remain a key priority for the US administration, especially as she notes the US Customs and Border Enforcement and Homeland Security are still fully funded, while other departments such as USAID have been scrapped completely.

She continues: “Another thing that isn’t changing is the growing interest in EPR and circularity because it’s being driven at the state level and states are in the driver seats for EPR.”

Sadly, she says there are risks around engagement with supply chain partners as the scrapped USAID department was very much involved in a lot of projects, including renewable energy.

Plus, she shares many American brands relied on these programmes to help them navigate relationships in different sourcing countries so those relationships have been fractured.

Given the NGOS these brands previously worked with are losing funding, they are understandably asking brands to fill the gaps but, she says brands are also being squeezed by the tariffs.

Murtha states: “There’s a paralysis on what we can hold on to without the US government backing us up.”

Should tariffs be used to boost sustainability?

However, Murtha can see tariffs as being part of the solution when it comes to sustainability. She suggests that preferential trade rules based on sustainability could be beneficial.

She says: “We haven’t tried to use tariff policy enough and it’s not being used in the right way right now. Tariffs are a part of that.”

The CCO and co-founder of WWD China, Johannes Neubacher who was also on the panel said that he categorically does not believe in this as an idea.

He explains: “So many companies have invested millions in upgrading their production systems to be compliant with new standards that it can’t be made the responsibility of the consumer to pay for this”.

He continues: “The fashion supply chain is also too complicated for a consumer to understand which product was made in the better carbon factory”.

He admits the fashion supply chain is a challenge for younger, smaller sustainable brands because it is so fractured, so they need help with finding the right solution providers for their own company.

On the plus side he says, it’s a good time to be a smaller ethical brand as consumers want to see more environmental consumption and personalisation and these young brands are in the “perfect position” to achieve this.

Should fashion brands source from China in future?

Neubacher advises fashion brands concerned about sustainability to take proactive steps instead of looking at regulations and building compliance around what already exists.

He encourages fashion brands to look at the Chinese supply chain and how it is operating in a sustainable way as he says: “The sustainable fashion industry will be the standard of the future, so it’s better to get ready now and follow your path.” This includes everything within the supply chain from manufacturing and material innovation to creating circular business models.

He says the second key thing is technological innovation: “Keep an open mind as AI is changing the face of the fashion industry and there are so many tools already available in the market, such as 3D sampling to reduce waste”.

He continues: “Real sustainability is a global phenomenon and requires a global supply chain – not a local one. Look at who to work with and who your partners will be for the next 20 years as all the bridges are already out there we just need to cross them.”

How should fashion brands ensure sustainability comes first in the supply chain?

Murtha’s advice to fashion brands is to ensure sustainability sits front and centre within every department and every team.

She says the organisational structure should be such that there’s less of a sustainability team and instead, there is someone within finance, legal, sourcing, operations and so on, owning sustainability.

That way, she argues it’s easier for them to make sure the balls don’t get dropped.

Plus, she says it’s “creating a level of resilience that’s necessary in this turbulent time”.

Neubacher suggests China is already one step ahead in terms of transforming the supply chain for sustainability.

He shares: “We are currently witnessing a transformation of the China fashion industry in terms of sustainability which I think is one of the most important moments for the entire fashion industry since the Industrial Revolution”.

He asserts China’s commitment to sustainability is equating to investments in the supply chain, new materials, net-zero factories, sustainable production, AI and technology.

Crucially, he says the innovation that’s currently happening in the Chinese market will completely change the face of the fashion industry in China.

He states: “China is not interested in going back to the low production model. This is something that will fade out.”

Who will benefit most from China’s sustainable fashion industry?

Neubacher believes the next two years offer an incredible opportunity for the European fashion market and fashion companies to have conversations with the Chinese fashion industry and supply chain again, as it could impact the way business is carried out over the next 50 years.

Neubacher believes Chinese manufacturers are confused about all the regulatory changes coming out of Europe, but China is pushing forward with its own significant sustainability agenda.

For example, China is committed to recycling up to 20% of textiles by 2050. Plus, he says there are lots of great small-scale ideas coming out of Europe such as mushroom leather alternatives being made in Scandinavia. But, he suggests it is the scalability that China can offer that will make these ideas mainstream.

He believes the European fashion industry should strengthen its communications with the Chinese industry and lead the conversation on rethinking the supply chain system because it could change the way we do business for the next 20 years.

By Just Style