Mission Organisation and Structure

The trade mission has been organised by the Italian Trade Agency in close collaboration with ACIMIT — the Association of Italian Textile Machinery Manufacturers — and Confindustria Moda. The programme will feature dedicated workshops on 20 October in Santa Catarina and 22 October in São Paulo, covering two of Brazil’s key textile manufacturing regions.

The delegation brings together 18 textile machinery manufacturers alongside companies with expertise in yarns, fabrics, and clothing accessories, collectively representing a broad cross-section of the Italian textile supply chain.

Planned activities include technical presentations, business-to-business meetings with Brazilian manufacturers, and site visits to local production facilities.

Regional Focus Areas

Activities in Santa Catarina will engage with the textile manufacturing centres of Blumenau, Joinville, and Brusque. The São Paulo leg of the mission will cover Americana and Denim City São Paulo, an established hub for textile and denim innovation.

Italy’s Textile Machinery Exports to Brazil

Brazil holds the tenth position among the leading export destinations for Italian textile machinery. Exports to the country reached €48 million in 2025, with an additional €20 million recorded in just the first half of 2026 — an indication of steady and sustained commercial momentum.

Within the export mix, finishing machinery accounts for the largest share at 57%. Accessories and other machinery each represent 11%, while knitting machinery contributes 10% — pointing to meaningful opportunities for Italian technology suppliers active in Brazil’s knitwear and textile manufacturing sectors.

ACIMIT President’s Perspective

Marco Salvadè, President of ACIMIT, highlighted the strength of the existing relationship and the potential for further collaboration. “Brazil is a market of great interest to our industry, with which we have well-established commercial relations and significant prospects for collaboration,” he said.

Salvadè noted that the mission would serve as a platform to strengthen dialogue between Italian suppliers and Brazilian manufacturers, while showcasing the role that innovative, flexible, and sustainable technologies can play in the modernisation of Brazil’s textile industry. He also pointed to the growing interest among local manufacturers in improving production efficiency, sustainability, and technological capabilities as a driver for further engagement.

Participating Companies

The 18 Italian textile machinery companies taking part in the Brazil textile industry trade mission are Biancalani, BTSR, Color Service, Corino Macchine, Durst, Reggiani Macchine, Erhardt + Leimer, Ferraro, I.M.A., Itema, Lawer, M.C.S. Officina Meccanica, Mesdan, Monti-Mac, MSJK (MS Printing & JK Group), Pinter Caipo Italia, Salvadè, and Savio Macchine Tessili.

Regional Performance Remains Sharply Divided

Across global regions, the picture was far from uniform. South Asia emerged as the strongest performer, registering a positive current business conditions reading of +13 percentage points, while Africa followed at +9 percentage points — making these two the only regions to report positive readings in the ITMF textile survey.

In contrast, North and Central America recorded the weakest regional reading at -56 percentage points. South America followed at -44 percentage points, and Europe posted a reading of -36 percentage points, underscoring the breadth of challenges facing manufacturers across developed and emerging economies alike.

Value Chain Performance Varies Considerably

Performance across the textile value chain also differed meaningfully by segment. Fibre producers stood out as the only segment to report positive current business conditions, with a reading of +67 percentage points. Spinners, however, recorded -33 percentage points, while finishers reported -42 percentage points. Textile machinery manufacturers registered -35 percentage points, which the survey attributed to companies’ continuing reluctance to commit to capital expenditure — a reflection of broader caution prevailing through the global textile market.

Six-Month Outlook Improves, Though Confidence Is Uneven

Forward-looking sentiment was more encouraging. The global expectations indicator for the next six months reached +19 percentage points. However, 46% of respondents expected no change in conditions, indicating that improved sentiment has not yet translated into broadly stronger trading signals on the ground.

Africa was the most optimistic region with an expectations reading of +59 percentage points, while East Asia at -20 percentage points and South-East Asia at -6 percentage points were the only regions to retain a negative outlook for the period ahead. Among industry segments, fibre producers again led with an expectations balance of +67 percentage points.

Order Intake, Demand Concerns, and Inflationary Pressures

Order intake improved only marginally to -24 percentage points, remaining in negative territory. South America reported a record low of -69 percentage points in this category, pointing to particularly difficult demand conditions in the region.

Weak demand remained the concern most frequently cited by respondents in the ITMF survey, with 56% of participants flagging it as a primary issue. High raw-material prices were cited by 42% of respondents, and energy costs were flagged by 41%. The federation noted that rising costs and inflation could limit the scope for a meaningful near-term recovery across the global textile market.

The survey also linked renewed inflationary pressure specifically to the war in Iran. Meanwhile, concern over geopolitics fell to 36% of respondents, down from 46% recorded in the July survey.

US Tariffs Prompt Varied Industry Responses

Companies have responded to US tariffs in a range of ways. Nearly three in ten respondents — 29% — said they were actively diversifying into markets outside the United States. A further 23% were investing in automation and efficiency measures, while the same proportion reported absorbing higher costs directly.

Order Backlogs, Capacity Utilisation, and Inventory Levels

Order backlogs shortened slightly to 2.3 months, remaining within the 2.0-to-2.5-month range that has been observed since mid-2023. The ITMF noted this reflects a prevailing tendency among companies to operate primarily against confirmed orders rather than building longer production pipelines.

Capacity utilisation increased to 71%, rising above the 68% low recorded in November 2023. Even so, it remained well below the levels of more than 80% reported prior to late 2022 — a gap that continues to weigh on the broader outlook for the global textile market.

Order cancellations held steady at approximately 2% on average, though finishers recorded increases for three consecutive survey periods. Inventory levels were generally lean, with South-East Asia reporting a record low. The Americas were an exception: relatively high inventories combined with weak incoming orders pointed to a build-up of unsold stock, according to the ITMF textile survey findings.

PPWR Training Kicks Off with SPEAC Partnership

The first online training session took place on 21 September 2026 and focused on the EU Packaging and Packaging Waste Regulation, commonly known as the PPWR, which came into effect on 12 August. The session was led by Dr Liu Kaiming, a key expert from SPEAC, an EU-funded project with which Shein has previously collaborated to deliver seller-focused regulatory briefings.

The PPWR session covered the regulation’s background, the available compliance routes, and a range of implementation considerations including recyclability, traceability, labelling requirements, and packaging-waste reduction obligations. This training forms part of a broader 2026 programme that Shein has outlined for its marketplace sellers, which will also include dedicated sessions on the Digital Product Passport and regulations governing restricted substances across textiles, apparel, jewellery, and chemical products.

The programme is specifically designed to help marketplace vendors understand EU product safety and consumer protection requirements that are directly applicable to their operations.

Building on Earlier Training Efforts from 2025

The 2026 sessions build on two previous training events jointly organised by Shein and SPEAC in 2025. Those earlier sessions addressed the EU General Product Safety Regulation for consumer goods and compliance standards applicable to electronic products sold within the EU market. The progression from 2025 to 2026 reflects a continuing effort by Shein to keep its marketplace sellers informed as the EU’s regulatory environment continues to evolve.

According to Shein, the goal of these seller-focused initiatives is to help marketplace vendors better understand and implement European requirements relating to product safety and consumer protection. These training sessions also complement the company’s own compliance responsibilities as an EU online marketplace, as mandated by regulations including the General Product Safety Regulation and the Digital Services Act.

Julien Faivre, Senior Product Compliance Director at Shein EMEA, commented on the initiative: “Shein’s collaboration with SPEAC highlights its commitment to driving compliance awareness amongst its marketplace sellers. The training series complements Shein’s ongoing efforts to provide marketplace sellers with access to information and training on the regulatory requirements applicable in the markets where they operate.”

Safety and Quality Programme Launched with Global Testing Bodies

In parallel with the SPEAC collaboration, Shein also launched a dedicated product safety and quality compliance training programme for marketplace sellers in May 2026. This programme was organised in partnership with third-party testing and certification organisations including Bureau Veritas, SGS, and TÜV SÜD.

The initiative is designed to help sellers adapt to ongoing changes in safety requirements and industry standards, supporting them in navigating global compliance challenges. According to Shein, the programme spans regulatory updates, product safety requirements, testing standards, and industry practices across international markets.

Together, these initiatives reflect Shein’s stated approach of equipping its marketplace seller community with the knowledge needed to meet both EU-specific and broader international regulatory standards. The Shein EU compliance training efforts, delivered through established expert bodies and global certification partners, represent a continued focus on regulatory education across the platform’s seller network.

The trend is already visible in Jiangsu province, where a textile equipment manufacturer reportedly received 13,000 orders in a single month for specialised soft materials used in robot coverings. These materials are designed to conduct heat, reduce static electricity and cushion impacts—functions that go far beyond traditional textile applications.

Unlike conventional fabrics, robot skin textiles must be engineered to work around robotic joints and moving components. The materials need to combine strength, elasticity and flexibility while supporting heat dissipation and protecting internal systems. Frequent movement at shoulders, elbows and knees requires coverings that can bend repeatedly without losing performance.

The growing demand is closely linked to the expansion of China’s humanoid robot industry. Companies such as ENGINEAI, XPENG and Leju Robotics are establishing automated production lines capable of manufacturing robots at higher volumes. As production scales up, manufacturers require standardised materials that can be integrated into efficient assembly systems.

This shift is opening new possibilities for the textile sector. Textile manufacturers are adapting expertise in technical fabrics, coatings and functional materials to meet the needs of robotics. Advanced fibres, conductive fabrics and flexible composite materials are becoming part of a broader supply chain that includes electronics, sensors and automation technologies.

Flexible sensing layers are another area where textiles play an important role. Thin-film pressure sensors integrated into robot coverings allow machines to detect touch and adjust gripping force. Such technologies can enable robots to handle delicate objects and interact more naturally with people.

Industry observers believe robot skin is emerging as a distinct category within technical textiles. Suppliers are increasingly combining textile engineering with electronics and smart material technologies to create products designed specifically for humanoid robots.

As robot manufacturing moves toward mass production, consistency and quality will become increasingly important. Textile companies capable of delivering durable, high-performance and standardised materials may find new opportunities in this evolving market.

The rise of humanoid robotics highlights how the textile industry is expanding beyond traditional sectors into advanced manufacturing. By applying expertise in functional fabrics and material innovation, textile companies are helping shape the next generation of intelligent machines.

Seven-Month Profit Landscape Across Ownership Types

For the January–July period, state-holding enterprises recorded a cumulative profit of 1,491.89 billion yuan (approximately $222 billion), marking a YoY increase of 16.3 per cent. Share-holding enterprises outperformed with a profit of 3,549.40 billion yuan (around $528.17 billion), up 23.6 per cent compared to the same period last year.

Enterprises funded by foreign investors and investors from Hong Kong, Macao, and Taiwan earned 1,013.78 billion yuan (approximately $150.86 billion) between January and July, representing a more modest YoY rise of 1.2 per cent. Private enterprises, on the other hand, reported profits of 1,135.22 billion yuan (around $168.93 billion), reflecting a YoY increase of 10.9 per cent — a figure that underlines the continuing resilience of China’s private industrial base.

Manufacturing Profit Growth Powers the Broader Gains

China’s manufacturing industry proved to be a key engine of the overall expansion, earning a cumulative profit of 3,437.60 billion yuan (approximately $511.53 billion) in the seven-month period — a YoY increase of 18.8 per cent, as noted in the NBS release. This manufacturing profit growth continues to represent one of the stronger pillars of China’s industrial output performance.

Textile Industry Contribution

The country’s textile industry added to the positive momentum, with its total profit growing 7.9 per cent YoY to reach 32.68 billion yuan (approximately $4.86 billion) during the January–July period.

Chemical Sector Leads in Growth Rate

Raw chemical materials and chemical products manufacturers delivered the most striking growth rate among the tracked segments, with profits surging 56.6 per cent YoY between January and July. This sharp uptick in the chemical industry China segment significantly contributed to the overall industrial profit landscape.

Revenue, Costs, and Profit Rate at a Glance

Industrial enterprises above the designated size generated a total revenue of 80.92 trillion yuan (approximately $12 trillion) from January to July, representing a YoY increase of 6.5 per cent. Operating costs over the same period came in at 68.79 trillion yuan (approximately $10.23 trillion), rising 5.9 per cent YoY — a rate slower than revenue growth, indicating improving cost efficiency across the sector.

The profit rate of business revenue for this group of enterprises stood at 5.66 per cent, up 0.54 percentage points compared to the same period last year — a metric that reflects the gradual improvement in margins that has accompanied the broader rise in China industrial profits.

A Quarter-Century of Trade Progress Under AGOA

For 25 years, the African Growth and Opportunity Act has played an integral role in shaping U.S. trade relationships across the African continent. By granting eligible Sub-Saharan African countries duty-free access to U.S. markets, AGOA has strengthened American exports in textiles and agriculture while cultivating a broad range of commercial partnerships between the United States and Sub-Saharan Africa. The AGOA extension now ensures these relationships continue to develop without interruption.

Similarly, over more than 15 years, the Haiti HOPE/HELP programs have provided meaningful support to both U.S. and Haitian textile industries. By extending duty-free access for apparel and textile products from Haiti into the United States, the Haiti HOPE/HELP framework has helped build durable business ties between the two neighboring nations, underpinning a trade corridor that benefits workers and businesses on both sides.

Industry Response to the Vote

Beth Hughes, AAFA’s Vice President of Trade and Customs Policy, expressed the association’s appreciation for the legislative action. “We are grateful for the bipartisan, bicameral support these vital programs have received and look forward to President Trump signing the two-year extension into law,” she stated. “Our industry remains firmly committed to these programs and encourages Congress to use this extension as an opportunity to modernize AGOA and Haiti HOPE/HELP and build toward a 15-year renewal. Long-term renewal continues to be the goal in order to encourage long-term investment, deepen trade partnerships, and strengthen industries at home and throughout the region.”

AAFA’s Ongoing Advocacy for Long-Term Renewal

The AAFA has been a consistent advocate for the renewal of both AGOA and Haiti HOPE/HELP programs, engaging Congress and the Administration on multiple fronts. In July, the association provided formal testimony before the Office of the U.S. Trade Representative specifically regarding AGOA’s renewal, reinforcing its commitment to securing stable, long-term apparel trade policy frameworks.

Both AGOA and Haiti HOPE/HELP have historically enjoyed strong bipartisan support over decades of legislative activity. The AAFA noted that a long-term renewal of these programs is essential to providing the certainty that U.S. companies need to plan investments and to offering stability for workforces across Sub-Saharan Africa and Haiti. The current two-year AGOA extension, while welcomed, is seen by the association as a bridge toward the broader, more enduring legislative commitment it continues to advocate for.

With duty-free trade access preserved through end of 2028 under the AGOA extension and the Haiti HOPE/HELP framework, both domestic and international stakeholders in the textile and apparel sectors gain a period of continued operational certainty as longer-term legislative discussions progress.

Washington Invokes Prior EU Commitment on Trade

In an official statement, the US Government referenced a prior commitment made by the EU to “undertake efforts to ensure” that the CSDDD and CSRD “do not pose undue restrictions on transatlantic trade.” The statement also called on the EU to “work to address US concerns regarding the imposition of CSDDD requirements on companies of non-EU countries with relevant high-quality regulations.”

The US further stated that “the directives’ extraterritorial reach and costly and onerous supply chain due diligence obligations will adversely impact the ability of US businesses to compete on a level playing field in the EU market.”

Reporting Standards and the Double Materiality Divide

A central point of friction highlighted in the US statement concerns the difference in reporting standards between the two jurisdictions. The CSDDD and CSRD require impact-based materiality reporting under a “double materiality” standard, which takes into account both financial risks and a company’s broader impact on people and the environment. This stands in direct contrast to the single financial materiality standard that governs reporting obligations under US law.

According to the US Government, “the extraterritorial reach of the CSRD and CSDDD would significantly expand the reporting burden for non-EU companies with minimal links to the EU market.” The statement went on to assert that the United States already maintains “a rigorous regulatory regime governing supply chain mapping and due diligence,” and that extending CSDDD obligations to US companies already subject to this domestic framework “would create duplicative and potentially conflicting obligations for US firms, thus violating basic principles of international comity.”

What the US Is Formally Requesting

The US Government has laid out a set of direct requests to the EU, seeking concrete changes to how the CSDDD and CSRD are applied to American businesses and their affiliates operating within Europe.

The US has asked the EU and its Member States to significantly limit CSDDD and CSRD reporting and due diligence requirements on US businesses, and to limit enforcement actions against them. More specifically, the application of the CSDDD should be restricted to the activities of EU subsidiaries of US businesses or the EU business partners of US businesses.

Furthermore, the US has requested that the EU only apply the CSDDD to goods that are produced in, or services that are supplied from, within the EU. On the matter of penalties, Washington has asked that the EU prohibit the levying of any financial penalty on a US business, or an EU subsidiary of a US business, where that penalty is based on revenue derived from activities conducted outside the EU.

The US has also called on the EU to prohibit private rights of action — meaning civil lawsuits brought by individuals or organisations — unless they are premised on an official supervisory or enforcement finding by a regulatory body.

A Deepening Regulatory Divide

The US position underscores the growing tension between the EU’s expanding framework for corporate sustainability and supply chain due diligence and the concerns of trading partners who view these measures as having an overreaching extraterritorial effect. The CSDDD US trade rules dispute reflects broader questions about how global businesses will navigate an increasingly complex and sometimes conflicting landscape of sustainability regulations across major economies.

With the EU having previously signalled a willingness to engage on concerns around transatlantic trade, the pressure from Washington adds new urgency to ongoing discussions about the scope and enforcement of supply chain due diligence obligations under EU law.

Adding to the positive outlook, the Industry Confidence Index held firm in the expansion zone, registering at 53.10 in July, a signal of improving industrial activity across the sector.

Investment and Output Growth Reinforce Sector Resilience

The recovery in Indonesia’s textile and garment sector is being further backed by growing investment interest. The industry attracted IDR 11.40 trillion in investments during the first half of 2026, marking an increase of 11.85 per cent compared to the same period a year earlier. Sector output also registered healthy growth, expanding 6.36 per cent year on year in the second quarter, according to industry reports.

These figures reflect a sector that continues to draw domestic and international capital even as global trade conditions remain competitive.

Government Commits to Supporting Competitiveness and Global Market Expansion

Kartasasmita confirmed that the government will continue engaging with industry associations, businesses, regional governments and relevant agencies to strengthen the sector’s competitiveness and support its expansion in international markets. Several policy measures are already in motion to back this commitment.

These measures include investment incentives, restructuring programmes, and access to labour-intensive industry credit. Export financing is being facilitated through the Indonesian Export Financing Agency, known as LPEI, while trade safeguard mechanisms are being reinforced. The government has also announced faster implementation of the Making Indonesia 4.0 programme, which targets the digital and technological transformation of key manufacturing industries including textiles.

Sustainability is another priority shaping the sector’s direction. The government is actively promoting Green Industry Standards, responding to growing demand from international buyers who increasingly factor environmental compliance into their sourcing decisions. Indonesia textile exports stand to benefit as global buyers prioritise suppliers that align with sustainability benchmarks.

Focus on Midstream Strengthening and Supply-Chain Integration

Beyond export performance and investment, the government has identified textile manufacturing as a key sector within its broader industrial transformation agenda. Particular attention is being directed toward strengthening the midstream segment, which encompasses yarn production, fabric manufacturing, dyeing, printing and finishing processes.

Improving these midstream capabilities is seen as essential to better supply-chain integration, which in turn supports the sector’s overall competitiveness. The Making Indonesia 4.0 programme plays a relevant role here as well, with its emphasis on modernising production processes across the manufacturing value chain.

With Indonesia textile exports on an upward trajectory, investment rising, and a comprehensive set of policy tools being deployed, the garment sector remains a cornerstone of the country’s industrial growth strategy heading into the second half of 2026.

A Valuation Under Pressure

According to Reuters, citing people familiar with the matter, Shein’s current IPO marketing price band sits in the $25 billion to $28 billion range. This marks a further reduction from the $30 billion to $40 billion target that had been reported earlier this month, and falls well below the $40 billion to $50 billion valuation cited just last month. The Shein Hong Kong IPO trajectory has clearly shifted, with each revision pointing to a more cautious market reception than originally anticipated.

The company is expected to issue up to 341.6 million shares in the offering, representing approximately 8% of its total shares. At a $25 billion valuation, the Hong Kong IPO could raise as much as $2 billion, according to a fourth source cited by Reuters.

Revenue Slowdown and Financial Headwinds

Shein’s financial performance tells a story of rapid deceleration. The company posted year-on-year net revenue growth of 41.1% in 2023 and 20.7% in 2024. By 2025, however, that growth had slowed to just 8%, with total revenue reported at $41.8 billion. The slowdown extended into 2026, with first-quarter revenue growing by only 1.1% — a direct reflection of the impact of US customs duties and tariffs imposed since May 2025.

Financial filings cited by Reuters revealed that Shein posted a net loss of $99 million for the first quarter of 2026, alongside $328 million in fair value losses on convertible shares. Net income for 2025 stood at $2.06 billion. Based on these figures, a $25 billion valuation puts the Shein IPO price at roughly 12 times earnings.

Trade Costs, Regulation, and Competition

The company’s valuation and investor appetite have been eroded by a combination of factors. A dramatic slowdown in revenue growth has been compounded by rising trade costs, increasing regulatory scrutiny, and intensifying competition. Once a rapidly expanding e-commerce player with a low-cost clothing offer reaching approximately 160 countries, Shein has faced government crackdowns on the sale of cheap Chinese-made goods in major markets, particularly the United States — developments that have dented both its growth prospects and profitability.

Adding to these pressures, Shein recently lost a copyright infringement case against budget rival Temu, further unsettling investor sentiment around its competitive position in the fast fashion space.

The Path to Listing

Shein began seeking approval for a Hong Kong IPO from Chinese authorities in August last year. The process reportedly involved a lengthy wait for regulatory clearance, with the decision requiring sign-off from senior levels of the Communist Party, according to sources with direct knowledge of the matter.

The lower valuation also carries structural implications for existing stakeholders. Deal provisions require additional shares to be issued if the final IPO price fails to meet previously agreed thresholds — meaning the revised pricing could directly affect the allocation of shares between founders and pre-IPO investors.

The Shein Hong Kong IPO share sale could come as soon as late August, with the company’s market debut on the Hong Kong stock exchange expected on 28 August.

Net income surged to $117 million compared to $22.4 million in the corresponding quarter of the previous year. The figure includes a $50.1 million benefit derived from tariff refunds, net of the release of capitalised tariff costs, specific inventory reserves, and estimated reimbursements to vendors.

Broad-Based Growth Across All Segments

The company’s second quarter performance was driven by strong double-digit growth across all segments, geographies, and channels. Amer Sports reported over 30% revenue growth for the quarter, with standout contributions from Salomon Softgoods, a strong omni-channel performance from Arc’teryx, and an acceleration in the Wilson Tennis 360 business. This broad-based strength underlines the company’s position in the healthy and growing premium sports and outdoor market.

CEO James Zheng stated that the company’s global momentum continued through the second quarter. He pointed to another exceptional performance from Salomon Softgoods, a strong Arc’teryx omni-channel result, and a Wilson Tennis 360 acceleration as the key drivers. He expressed high confidence in the future outlook for Amer Sports, citing the broad-based momentum across the portfolio, the healthy and growing premium sports and outdoor market, and the world-class teams in place around the world.

CFO Andrew Page also highlighted the company’s second quarter results as another great financial performance across the profit and loss statement, with strong sales, margins, and earnings per share. He noted that ongoing investments in the three largest growth opportunities — Arc’teryx, Salomon Softgoods, and Wilson Tennis 360 — are clearly paying off and that the company intends to continue reinvesting behind these early-stage growth engines to ensure high quality, long-duration growth and strong brand equity over the long term.

Raised Full-Year Guidance for 2026

On the back of its strong Q2 performance, Amer Sports has raised its full-year 2026 guidance. The company now anticipates full-year reported revenue growth of approximately 24%, a gross margin in the range of 60.5% to 61.0%, an operating margin between 14.2% and 14.5%, and adjusted diluted earnings per share of $1.27 to $1.30.

Page noted that the strong position of Amer Sports brands, excellent execution by its teams, and healthy demand trends in the market gave the company the confidence to raise its full-year 2026 sales, margin, and earnings per share guidance.

The Amer Sports Q2 profit results reinforce the company’s standing as a formidable player in the global premium sports and outdoor category, with operating profit growth continuing to reflect the sustained investment and expanding commercial reach of its flagship brands.