United States textile and apparel imports demonstrated surprising structural resilience in Q4, 2025, even as the regulatory environment underwent significant shifts. Despite the imposition of reciprocal tariffs that reached an effective average of 16.0 per cent - the highest level since the 1930s - import volumes from key partners remained stable during the first three quarters. However, the market entered a period of acute volatility in early 2026 following a landmark Supreme Court ruling that invalidated sweeping executive tariffs imposed under the International Emergency Economic Powers Act (IEEPA). This judicial ‘reset’ saw effective rates plummet from 16.0 per cent to 9.1 per cent overnight, only to be partially offset by a new 10–15 per cent temporary import duty enacted under Section 122 of the Trade Act of 1974.

Diversification beyond traditional powerhouses

The 2025-26 period has solidified a permanent reconfiguration of the US supply chain. China’s market share in apparel value dropped to 11.3 per cent by late 2025, a historic low compared to nearly 20 per cent a year prior. Vietnam and Bangladesh have emerged as the primary beneficiaries of this ‘China Plus One’ strategy, with Vietnam consolidating its lead through a 12.9 per cent annual increase in shipments. Despite facing punitive reciprocal duties that peaked at 63.4 per cent on certain apparel lines, India managed to keep annual export values to the US broadly stable at $9.68 billion, proving the indispensability of its cotton-based product categories.

Fiscal impacts and consumer pass-through

The commercial impact of these trade barriers has primarily manifested in pricing rather than a cessation of trade. Data from The Budget Lab at Yale indicates that tariff costs were passed through to consumers at rates between 31 per cent and 63 per cent for core goods. While inventory replenishment initially drove a 6.59 per cent rise in import value during mid-2025, the subsequent ‘tariff-rush’ led to erratic shipping schedules. Retailers are now navigating a complex landscape where the threat of permanent 15 per cent global duties looms, potentially adding $1,300 in annual costs for the average household.

The global textile and apparel sector serves as the backbone of trade for emerging economies, with the US remaining the world's largest consumer market, importing over $118 billion annually. Leading suppliers like India and Vietnam focus on vertically integrated cotton and man-made fiber production.

Established in the post-quota era, these markets are now transitioning toward sustainable, ‘mulesing-free’ wool and recycled synthetics. Despite 2026 geopolitical headwinds, the sector targets a 4–5 per cent CAGR, supported by digitalized supply chains and high-speed freight corridors designed to offset rising logistics costs.