Dramatic cuts to US foreign development spending are kneecapping the fragile network of civil society organisations and nonprofits that defend workers in the industry’s global supply chains.
Over the past six weeks, a critical support network protecting human rights in fashion supply chains has begun to crumble, another casualty of the U.S. government's sweeping budget cuts. The Trump administration’s decision to freeze foreign aid has dealt a severe blow to labor advocacy groups, many of which provide essential protections for garment workers worldwide. This sudden financial void threatens to reverse decades of progress in improving working conditions, exposing millions to increased risks of exploitation.
The crisis escalated in January when an executive order halted funding for organizations that advocate for labor rights and provide social protections to vulnerable garment workers. Last week, the U.S. government confirmed that most of these funds would not be reinstated, despite ongoing legal challenges. Thousands of NGOs, many of them deeply embedded in the fashion industry’s ethical oversight, were notified that their grants had been revoked. In total, nearly $60 billion in aid has been slashed, dismantling initiatives that have long served as a lifeline for workers facing wage theft, hazardous conditions, and labor abuses.
The U.S. has historically been the largest financial backer of global labor protections, but it is not the only nation pulling back. Across Europe, governments are redirecting funds toward defense and shifting away from international development, leaving worker advocacy groups with even fewer resources. The ripple effects are already being felt, with once-vital programs grinding to a halt. In Pakistan, a UK-based nonprofit was forced to suspend its work assisting garment workers with legal disputes after U.S. funding was abruptly cut. Similar shutdowns are playing out across major manufacturing hubs, endangering hard-fought labor rights progress.
The implications extend far beyond funding shortages. Many of the organizations losing financial support are the same ones responsible for investigating and exposing labor violations in fashion supply chains. With their absence, brands will face less scrutiny, and abuses such as forced labor, gender-based violence, and illegal wage suppression could become harder to track and combat. Some NGOs, like the Solidarity Center, have already taken drastic measures to survive—one of the largest U.S.-based worker rights organizations, it has shut down its website to cut costs. Others, such as the Clean Clothes Campaign, have issued public pleas for financial support as their survival hangs in the balance.
This funding crisis comes at a precarious time. Even before the cuts, fashion’s human rights record was faltering, with the pandemic exacerbating wage theft and exploitation. Meanwhile, efforts to introduce stronger corporate accountability measures are being weakened. The European Union recently proposed diluting its landmark due diligence legislation, which would have required brands to track and improve working conditions throughout their supply chains. With governments stepping back from regulation and oversight, brands are now left with fewer incentives to uphold ethical practices.
How advocacy groups will replace these lost funds remains unclear. Philanthropic donations alone cannot bridge the billion-dollar gap, and corporate funding poses conflicts of interest that many labor groups are unwilling to accept. The reality is grim—without intervention, essential programs that safeguard garment workers could disappear, leaving one of the world’s most vulnerable workforces exposed. "If civil society and labor organizations take the hit, the economics of ethical interventions just won't be there," warns Remake CEO Ayesha Barenblat. As the financial scaffolding holding up ethical labor practices collapses, the fashion industry faces a stark reality: without accountability, exploitation will only deepen.