Market evolution: Headgear (CN 65) — 2015–2025

Introduction

This report examines the evolution of the European Union's external trade in headgear and parts thereof (Combined Nomenclature code 65) over the period 2015–2025. The product scope covers a wide range of items, from felt hat-forms and plaited headgear to knitted hats, safety helmets, and accessories such as headbands and chinstraps (Scope & Definitions).

Over the decade, the EU headgear market underwent a structural transformation. Import values grew by 81.9% (from €1,330M to €2,419M) while export values rose even faster, by 125.3% (from €506M to €1,139M). Yet the trade deficit widened from €824M to €1,280M, and the EU's net import reliance more than doubled—from 25.1% to 56.0% (Trade overview). Three main dynamics explain this evolution: a shift from volume-driven to value-driven domestic production; the rise of new Asian sourcing hubs alongside a relative decline of China; and an unprecedented increase in the EU's export orientation on global markets.

1. From Volume to Value: The Restructuring of EU Headgear Production

Domestic output collapsed in weight but surged in value

The most striking feature of the EU's headgear industry over the period is the divergence between physical production volumes and their monetary value. EU production quantity fell by 52.0%, from 171.1 million kg in the early period to 82.1 million kg by 2025. In the same span, production value rose by 42.6%, from €834M to €1,189M (Production volumes). This implies a near-doubling of the average unit value of EU-produced headgear, consistent with a strategic move upmarket—toward branded, technical, or design-intensive products—and away from commodity-grade, mass-market items.

Italy, France, and Portugal anchor the EU's comparative advantage

Revealed comparative advantage (RCA) data for 2025 confirm that a handful of member states carry the EU's specialisation in headgear. Italy leads with an RCA of 1.71 and a normalised RCA (RSCA) of 0.26, followed by Portugal (RCA 1.57) and France (RCA 1.55). Poland and Spain also display values above 1, indicating mild specialisation (Specialisation). At the other end of the spectrum, Ireland, Malta, and Cyprus show negligible headgear activity. This geographic concentration suggests that the EU's headgear export strength rests on a narrow production base—principally the traditional hat-making clusters of Italy (e.g., Tuscany's straw-hat district) and France—rather than on broad-based manufacturing across the bloc.

Export unit values rose far faster than import unit values

The price differential between EU exports and imports widened substantially. Export unit values rose by 106.4%, from €43,637/t to €90,077/t, while import unit values increased by only 11.3%, from €18,415/t to €20,499/t (Trade overview). This growing wedge is consistent with the EU increasingly exporting high-value items (luxury hats, designer headgear, specialist safety helmets) while importing lower-cost, mass-produced goods—primarily knitted and textile headgear—from low-wage countries.

2. Sourcing Diversification: The Rise of New Asian Suppliers and the Relative Decline of China

China remains the dominant supplier but its share has eroded

China was, and remains, the EU's largest single source of headgear imports, accounting for €941M in 2015 and €1,582M in 2025 (+68.1%). However, China's import value actually peaked at €1,993M in an intermediate year before retreating, suggesting that other suppliers have captured incremental growth. The volatility of Chinese shipments (coefficient of variation of 0.15) was notably low compared to other partners, reflecting the industrial maturity and scale of China's headgear sector (Partners).

Vietnam, Bangladesh, and Türkiye emerged as the fastest-growing suppliers

Three countries stand out for their explosive growth in EU headgear imports:

• Vietnam: from €33M to €196M (+489.7%), now the third-largest supplier.
• Bangladesh: from €23M to €62M (+167.7%).
• Türkiye: from €7M to €61M (+772.9%), the fastest rate of any top partner.

Together, these three countries added approximately €256M in incremental imports over the decade. This pattern is consistent with broader EU textile and apparel sourcing trends: as Chinese labour costs rose, EU importers shifted orders to lower-cost or geographically closer suppliers. Vietnam and Bangladesh benefit from competitive wages and preferential EU trade arrangements, while Türkiye offers proximity to Europe and short lead times.

Import concentration declined, indicating a more diversified supply base

The Herfindahl-Hirschman Index (HHI) for import value fell from 5,109 to 4,451 (−12.9%), and the volume-based HHI fell even more sharply, from 6,108 to 4,682 (−23.3%) (Concentration). While the HHI remains above 2,500—indicating a moderately concentrated market—the downward trend signals meaningful diversification. For EU policymakers concerned about supply-chain resilience, this is a positive development, though China still accounts for roughly 65% of total imports by value.

The United Kingdom's position weakened on both sides of the trade ledger

The UK's trade relationship with the EU in headgear contracted notably after 2020. UK exports to the EU fell by 39.7% (from €102M to €61M), while EU exports to the UK grew only modestly (+21.9%, from €126M to €153M). The likely explanation is the post-Brexit trade regime, which introduced customs formalities, rules-of-origin requirements, and potential tariffs that disrupted previously frictionless intra-European flows.

3. Export Surge and Growing External Exposure: The EU as a Net Exporter of High-Value Headgear

EU export values more than doubled, driven by price increases and new markets

EU exports of headgear grew from €506M in 2015 to €1,139M in 2025, a rise of 125.3%. Over the same period, export quantities grew by only 9.2% (from 11,583t to 12,643t). The implication is clear: the EU's export growth was overwhelmingly value-driven, reflecting higher unit prices rather than volume expansion (Trade overview).

The United States became the EU's top export destination

The most dramatic shift in export geography was the surge of EU headgear shipments to the United States: from €63M in 2015 to €197M in 2025 (+213.5%), making the US the EU's single largest non-EU export market by value. Switzerland also grew strongly (+126.2%, from €61M to €138M), as did Norway (+153.4%) and Ukraine (+664.8%). Meanwhile, exports to Russia fell by 35.4%, likely reflecting the impact of EU sanctions following 2022 (Partners).

The EU's trade intensity and export propensity surged to unprecedented levels

The EU's trade intensity (exports + imports as a share of production value) climbed from 58.7% to 100.7%, meaning that total trade now exceeds domestic production value. More strikingly, export propensity (exports as a share of production value) jumped from 31.8% to 102.2%, indicating that the EU now exports more headgear by value than it produces domestically—a situation made possible by re-export flows and the inclusion of imported inputs in exported products (Vulnerability).

Geopolitical shocks created price spikes in specific export corridors

The volatility analysis reveals two notable export-side price shocks. In 2022, EU headgear exports to Ukraine experienced a 168.3% price shift with an abnormality score of 5.4—consistent with emergency or humanitarian-driven demand following the Russian invasion. In 2023, exports to Israel saw an 89.0% price shift (abnormality 9.4), the highest abnormality score in the dataset. While the value shares of these shocks are modest (2.9% and 1.8% respectively), they illustrate how geopolitical events can propagate through even seemingly peripheral product categories (Supply shocks).

Product-level detail confirms the dominance of textile and "other" headgear

At the sub-product level, two categories dominate EU trade:

• CN 6505 (knitted/textile headgear, hairnets): the largest import category by both volume (72,819t, €1,127M in 2025) and a major export item (5,102t, €528M).
• CN 6506 (headgear n.e.s., including safety helmets): the largest export category by volume (6,635t, €493M) and the second-largest import (37,676t, €1,054M).

Export prices for these categories diverged sharply. CN 6506 export unit values rose from €36,891/t to €74,234/t (+101%), while CN 6505 export unit values nearly doubled from €54,328/t to €103,251/t. By contrast, import prices for CN 6505 remained relatively flat, reinforcing the pattern of the EU importing low-cost textile headgear and exporting premium products (Product segments).

Conclusion

Over the 2015–2025 period, the EU's headgear trade underwent a fundamental transformation. Domestic production shifted decisively from volume to value: the EU now produces far fewer hats by weight but commands significantly higher prices, anchored by Italian, French, and Portuguese specialisation in premium segments. On the import side, China remains the dominant supplier but has ceded ground to Vietnam, Bangladesh, and Türkiye, leading to a moderately less concentrated supply base. On the export side, the EU more than doubled its sales to non-EU markets, with the United States emerging as the top destination. However, this export surge was not enough to offset the even faster growth of imports: the trade deficit widened to €1,280M and net import reliance reached 56.0%.

The EU headgear sector is thus increasingly integrated into global value chains—importing volume from Asia, adding value through design and branding, and re-exporting at premium prices to wealthy markets. This model has delivered strong export growth and maintained the viability of traditional production clusters, but it has also deepened the EU's import dependence and exposed the sector to geopolitical supply disruptions. Policymakers should monitor both the concentration of sourcing (still heavily China-dependent) and the narrow geographic base of EU production specialisation.