The upheaval in global commerce presents the apparel industry with complex compliance challenges, on tariffs, forced labor, and other areas. Apparel companies’ product value chains are complex and stretch across the world, and the regulations governing them are subject to frequent change. Companies need to adapt quickly to new policies, and as an apparel executive, you need to protect your business and turn compliance into competitive advantage.
What You Need to Know:
The 2021 Uyghur Forced Labor Prevention Act fundamentally shifted how the U.S. enforces trade regulations. Under the law, retailers and apparel companies are held accountable for identifying compliance risks upstream in their global value chains.
With more than 20% of global cotton originating from China’s Xinjiang Uyghur Autonomous Region, the apparel industry is exposed to widespread compliance risks. The challenge is compounded by standard industry practices like blending cotton from different sources, and the complexity of multi-tier value chains that make it difficult to trace products’ origins. Standard mapping tools can take 250+ hours to trace a single product value chain and yield incomplete data that's immediately outdated, while supplier surveys achieve only a 10% response rate beyond Tier 1.
Why This Matters Right Now:
The consequences of non-compliance are immediate and severe. Detained shipments can cost companies an entire selling season and bring significant legal and storage fees. Beyond the immediate financial impact, reputational damage from non-compliance can have lasting effects on brand value. As more companies are added to the UFLPA Entity List, the risks spread to more apparel companies.
The costs of fragmented global trade include more than $1 billion in business disruptions from border detentions, production losses, and costs incurred to alter supplier bases. Meanwhile, executives are trying to keep abreast of rapid changes in tariff policies that could add millions of dollars in additional duties. This burden is compounded by the uncertainty over the Trump administration's fluctuating trade policy, complicating long-term planning and forcing executives to adjust sourcing strategies and compliance protocols.
However, this challenge also presents an opportunity, as consumer demand for ethical sourcing creates potential for market differentiation.
How to Take Action:
Success in this new regulatory and tariff environment requires comprehensive multi-tier visibility across your product value chain. Altana provides the most accurate picture of the global supply chain built from exclusive shipment data. Altana’s Product Passports enable you to request, share, and link product information across your supplier network, saving time and resolving risks by adding proof of compliance. With Altana, you can optimize value chains with insights into compliance and resilience risks, while also clearing borders by collaborating with logistics providers and regulators.
