Year 2025 has seen the global textile and apparel industry facing unprecedented volatility, largely because of the unpredictable US tariff policies. While the World Trade Organization (WTO) has revised its 2025 global trade forecast upwards, this seemingly positive news masks a complex reality: a rise in US imports due to its frontloading ahead of new tariffs, and a supply chain in flux as brands and manufacturers grapple with uncertainty.

The textile and apparel sector, a major contributor to international trade is at the epicenter of this disruption. Data from the first half of the year reveals a short-term scramble for goods, but long-term shifts are proving difficult to implement, creating a ‘wait and see’ environment that is having a significant impact on exporting nations and their workers.

Is it a temporary respite for global trade?

The WTO's revised forecast, predicting a 0.9 per cent increase in global merchandise trade for 2025 (up from a previous forecast of a 0.2 per cent decline), is a direct result of US import behavior. This increase, however, is not a sign of a strong, stable market. Instead, it is an artifact of companies rushing to import goods before new and heavier tariffs take effect. The WTO warns these tariffs could negatively impact trade in the latter half of 2025 and into 2026. This is particularly concerning for the textile and apparel sector, which is highly reliant on global supply chains.

The broader economic picture remains fragile. According to KPMG, global GDP is expected to slow from 3.2 per cent in 2024 to 2.7 per cent in 2025, and then to 2.8 per cent in 2026. This fragile demand, coupled with the unpredictability of trade policy, is forcing companies to put major investment decisions on hold.

US imports, the race against time

US import data for the textile and apparel industry confirms this trend of frontloading.

First Half 2025: As per the US Office of Textiles and Apparel (OTEXA), total US textile and apparel imports rose by 5.88 per cent in the first half of 2025 compared to the same period in the previous year. This was a direct result of inventory restocking and purchasing to get ahead of the anticipated tariff hikes.

Shifting sourcing patterns: The data shows a clear shift in global sourcing patterns. While China remains a major supplier, its market share is rapidly eroding. The new tariff regime has catapulted China's average tariff rate to 69.1 per cent, far exceeding other major suppliers. This widening tariff gap is a powerful motivator for brands to diversify their sourcing.

Countries like Vietnam, Bangladesh, Cambodia, and India have seen a rise in exports to the US as brands look to mitigate the impact of tariffs on Chinese goods. For example, Bangladesh reported a 25.13 per cent increase in apparel export volume to the US in the first half of 2025. Conversely, countries like Pakistan and Canada have seen a decline in their textile and apparel exports to the US.

The following data table illustrates the shifting landscape of US textile and apparel imports.

Table: US apparel import volume (H1 2025)

Data source: (OTEXA) and other industry sources. SME or Square Meter Equivalent

Impact on supply chain

The tariff-led instability has created a ripple effect throughout the global textile and apparel supply chain. Faced with higher costs from tariffs and supply chain disruptions, brands and retailers are absorbing a major portion of these costs rather than passing them on entirely to price-sensitive consumers. This is impacting profit margins. Meanwhile, to reduce the financial burden, US importers are negotiating with their suppliers to share the tariff costs. This has led to a decline in the unit price of apparel imports from major exporting nations. For instance, the unit price of apparel imports from mainland China fell by 4.1 per cent between February and May 2025 as a result of these negotiations.

While the immediate instinct is to find new suppliers, the transition is not simple. "Upending a company's supplier base can be a multi-year, if not a multi-decadal, undertaking," says Jackson Wood of Descartes. This has led to a China+1 or China+N strategy, where companies maintain their relationships with Chinese suppliers but gradually shift a portion of their production to other countries. The goal is to build redundancy and resilience rather than execute a complete exit.

Interestingly despite the tariff pressure, China is not a passive participant. The country's textile industry is leveraging its core strengths to remain competitive. China's well-developed and integrated textile ecosystem, from fiber production to final packaging, offers an unmatched advantage in terms of efficiency, speed, and cost savings. A large order that might take 50 days to complete elsewhere can be finished in 25 days in China.

Moreover, Chinese textile manufacturers are increasingly adopting advanced technologies like AI-driven systems, automation, and blockchain for end-to-end traceability. This improves production speed, quality control, and helps meet sustainability and compliance standards that are becoming increasingly important to global buyers. Also, Chinese exporters are actively diversifying their own markets, shifting their focus to non-US markets, including Southeast Asia and the European Union, to offset the decline in US-bound shipments.

Thus the textile and apparel industry in 2025 is a study in contradiction. While global trade numbers appear to be on the rise, this is a fragile and short-term phenomenon driven by a tactical response to unpredictable US trade policies. The underlying trend is one of substantial disruption, with established supply chains being tested and new ones slowly emerging. The full impact of these tariffs on global trade, and the long-term tactical decisions of companies, is yet to be seen. However, as the data from the first half of the year suggests, the current environment is putting immense pressure on manufacturers and their workforces, forcing a recalibration of global production and a painful reassessment of traditional trade relationships.