Despite the ‘Liberation Day’ tariff shockwaves initiated in April 2025, US textile and apparel imports have demonstrated remarkable resilience, stabilizing at $80.5 billion through the first three quarters. While the Trump administration’s aggressive reciprocal duties successfully slashed Chinese shipments by 27 per cent, the strategy failed to curb overall foreign production influx. Instead, the market witnessed a massive regional realignment, as US buyers bypassed 30-40 per cent tariff brackets by rerouting orders to lower-cost Asian corridors.
The vacuum left by China’s $11.7 billion contraction was rapidly filled by a 15.9 per cent surge in South-East Asian imports, which reached $24.3 billion. Vietnam and Bangladesh emerged as the primary beneficiaries of this tectonic shift in sourcing. Vietnam, now the US’s second-largest supplier, posted a 14.6 per cent increase, while Bangladesh saw an even sharper 18.2 per cent jump. Industry analysts at OTEXA suggest this ‘cluster sourcing’ model is a direct reaction to the universal 10 per cent baseline tariff, as retailers prioritize high-volume nations that offer the narrowest margin erosion.
The cost of resilience: Margin headwinds in 2026
While supply chains remained intact, the financial toll is mounting. High-profile retailers like Victoria’s Secret and Tapestry have reported projected tariff-related headwinds exceeding $260 million for the fiscal year. To avoid across-the-board price hikes, brands are accelerating ‘Endless Aisle’ and omnichannel technologies to optimize inventory and offset a 16.8 per cent average effective tariff rate - the highest since 1935. As the industry moves into 2026, the challenge shifts from finding new suppliers to absorbing a permanent 4 per cent to 7 per cent increase in landed garment costs.
The Office of Textiles and Apparel (OTEXA) is the primary federal body monitoring the health of the US fiber and garment industry.It is involved in tracking and publishing comprehensive data on US imports and exports of textiles, apparel, and footwear, while implementing trade preference programs. The organization monitors major global hubs including China, Vietnam, India, and the USMCA region (Mexico/Canada).
