3 days ago
Australia's fashion industry faces tariff hit but experts say it's been in decline for decades
When Dale McCarthy couldn't find skilled workers to produce her brand's swimwear, she had to take her manufacturing offshore.
"You actually need five different types of machinery, and someone who is an expert at using that machinery, to make our swimwear," she says.
The founder of Bondi Born turned to China and Vietnam to manufacture many of her brand's pieces.
"It was an emotional decision for me, but I think from a business point of view, it made absolute sense to go offshore.
"The quality is as good or better and the apparel costs were a third making [them] in Vietnam [compared] to Australia."
As the implementation of Trump administration's "reciprocal" tariffs looms, Australian fashion brands manufacturing overseas in some of the countries targeted by the steepest tariffs face tough decisions.
Bondi Born is just one of the many brands now having to pivot their manufacturing plans and target markets.
Moving production home isn't an easy fix — experts say Australia's local fashion manufacturing industry has been in a decline for more than three decades, with the current trade war exacerbating an existing problem.
"We're at a really challenging place because there's a real demand for locally made fashion, but there's very little in the way of actual manufacturing capability," Harriette Richards, senior lecturer in fashion and textiles at RMIT University, tells The Business.
Fashion is one of the Australian exporting industries operating under the cloud of tariff uncertainty.
Despite the 90-day pause between China and the US, swimwear brand founder Ms McCarthy says it has not made daily processes any easier.
"[It's been] terribly stressful, because it's been so up and down … [we think] 'quick, take everything down off the website, shift that … what are we going to do next season?'
"It's really challenging."
The Sydney-based founder has taken down Chinese-made products from Bondi Born's international site and has started to think about new manufacturers.
"We've now identified a Portuguese-based swimwear maker who can do the level of complexity and technical swimwear that we do, so for next season we're going to be using them."
She says she is going to bring some of the manufacturing back to Australia, but that means removing "the more complex designs".
Just 3 per cent of the clothing produced by local brands and designers is made in Australia.
Dr Richards says this is mainly manufactured here by an older workforce, with an average age of 57.
She says at RMIT, many of the students coming through the programs want to be designers and product developers, rather than taking up manufacturing jobs like sewing and stitching, which aren't seen to be "fun or exciting".
A lack of funding from the state and federal government to prioritise the next generation coming through is something Dr Richards also says is contributing to the problem.
"We've seen just a long-term sidelining of fashion as a significant contributor to the national economy and a really important space and economy where women are the primary contributors to the development of fashion."
During the past five years, Dr Richards says the fashion industry has seen just $2 million in federal funding, despite the fact it contributes 1.5 per cent of Australia's gross domestic product and pays $15 billion in annual wages.
She believes this is because "women are the primary contributors to the development of fashion".
"Women are seen, really as consumers of fashion, not so much as innovators, as entrepreneurs, as those skilled workers.
"It's really seen a neglect of this industry and an overlooking of it … it's not thought of as a cultural industry.
This 30-year decline in local manufacturing has now seen the industry's peak body partner with one of Australia's most popular and well-known brands to spark change.
The Australian Fashion Council (AFC) and RM Williams have launched a national strategy to bring garment manufacturing back onshore.
"What we would like to end up with is a strategic plan and vision for our sector to ensure we have a thriving local manufacturing sector for those products," AFC's chief executive Jaana Quaintance-James tells The Business.
"Now more than ever it seems to be needed in terms of Trump's tariffs uncertainty … it's the latest example of why we need local manufacturing capabilities in Australia," she says.
It involves six consultation sessions, before a final report is delivered in late 2025, exploring how to invest locally in technology, skills and machinery.
In the broader manufacturing sector women make up 28 per cent of the workforce, but in fashion manufacturing, they make up 53 per cent, Ms Quintance-James says, describing it as "important work and skilled work".
But she emphasises it's not about bringing all manufacturing home.
"We shouldn't compete on $2 products, this is about investment pieces — that when you buy something, you know where it comes from in Australia, you look after that product for a long time."
Investment pieces from Australia, made by skilled workers on an Australian wage, often means higher costs for consumers, which Dr Richards says isn't necessarily a bad thing.
"I think that our concern about [increasing prices] reflects a larger distortion in terms of our relationship with fashion."
She says this is because of the rapid expansion of fast fashion.
"There's a perception that fashion is low cost, it's affordable and that we can buy a lot of it and that it can be disposable, and I think we've really got away from the mode of production.
The RM Williams brand knows firsthand how difficult it is to manufacture at home.
"We are quite proud that we have Australian manufacturing in Adelaide … but what we do know is it's rare.
"We wanted to bring forward an opportunity to just really share from an industry perspective, share what we've got but also share in the challenges," says chief operating officer Tara Moses.
She says the industry has been stagnant for years.
"Something as simple as machinery, we have old machinery that has been around for 30, 40, 50 years.
"We need to upgrade those machines, and in order to upgrade those machines we need to have a skill set of people to buy those machines, to maintain those machines.
Ms Moses says when individuals work for RM Williams, they can develop skills, including through a boot-making apprenticeship.
"It's a nationally certified program [that we built] two years ago.
"It gives people an ability to come in and have a career in boot making which didn't exist a couple of years ago."
RM Williams also works with skilled professionals who are nearing retirement and brings them into the workshop to train the next generation.
"We do not want to lose that skill, so we're bringing that skill back into the workshop.
