For years, global retailers expected tariffs, geopolitical tensions and supply chain disruptions to spark a manufacturing renaissance across North and Central America. The assumption was that apparel production would come closer to US consumers as brands sought to reduce risk and shorten lead times. Instead, the latest sourcing data suggests a different outcome. Rather than leading to large-scale nearshoring, US apparel buyers are simply replacing one set of Asian suppliers with another. The Western Hemisphere remains largely on the sidelines as procurement teams diversify sourcing across Southeast Asia and emerging manufacturing hubs in North Africa.

The latest figures from the Office of Textiles and Apparel (OTEXA) shows, suppliers operating under the United States-Mexico-Canada Agreement (USMCA) accounted for only 3.4 per cent of total US apparel imports during the first four months of 2026, up only marginally from 3.2 per cent a year earlier. Meanwhile, traditional sourcing leaders saw sharp decline. China's share nearly halved while India also lost significant ground. The beneficiaries have largely been Vietnam, Cambodia, Indonesia, Egypt and Turkey rather than neighboring manufacturing economies.

Table: Comparison of US apparel imports

Vietnam has emerged as the biggest winner, increasing its market share to 22.5 per cent as retailers deepen investments in its well-developed manufacturing ecosystem.

Missing links in the Americas

The muted growth across the Western Hemisphere highlights a weakness rather than a temporary slowdown. While Mexico has attracted incremental apparel assembly work, the region lacks the vertically integrated supply chain needed to compete with Asia's manufacturing clusters. An important trend is reshaping regional trade dynamics. Mexican apparel producers are sourcing an increasing share of their yarns and fabrics from China instead of the US. As China's textile exports to Mexico continue growing, the traditional North American textile value chain is becoming progressively less integrated.

This shift also carries implications for US agriculture. The U.S. Department of Agriculture projects cotton exports of 12.3 million bales during the 2026-27 marketing year. However, achieving that target depends on stronger global textile demand rather than the expected boost from regional manufacturing. As Robert Antoshak, Managing Partner, Gherzi Americas, points out current sourcing patterns reflect diversification instead of regional concentration. “US apparel sourcing is becoming highly diversified rather than concentrated in the Western Hemisphere. Tariffs are changing the flow of goods, but driving stronger cotton demand will require a broader recovery in global textile consumption, not a rapid return of manufacturing infrastructure to North America."

His assessment reinforces that tariff policies alone are insufficient to rebuild manufacturing ecosystems without parallel investments in textile production, raw material integration and industrial capacity.

Synthetic advantage widens the gap

Another factor limiting nearshoring is the growing dominance of man-made fibres (MMF) in global apparel sourcing. Demand has steadily shifted toward performance apparel made from polyester, nylon and other synthetic fibres. Southeast Asia has built extensive vertically integrated MMF supply chains capable of producing high-value technical garments at scale.

Vietnam exemplifies this competitive advantage. During the opening months of 2026, synthetic apparel shipments from Vietnam to the US were nearly ten times larger than comparable exports from India. Vietnam's production ecosystem enables manufacturers to move efficiently from fibre production to finished garments, allowing retailers to consolidate sourcing.

In contrast, India continues to rely heavily on cotton-based apparel exports, while Mexico and Central America remain concentrated in Cut-Make-Trim (CMT) operations for basic garments. Without substantial investments in synthetic fibre manufacturing and textile processing, these regions face difficulty competing in faster-growing product categories. The challenge is compounded by cautious retail spending. Persistent inflation and weak consumer demand have prompted brands to prioritize inventory discipline over aggressive purchasing.

Table: Sourcing performance breakdown

The 11.6 per cent decline in overall US apparel import reflects retailers' continued focus on preserving margins amid uncertain consumer spending.

USMCA faces a critical test

Despite limited gains in sourcing volumes, USMCA continues to deliver meaningful commercial benefits. Nearly 94 per cent of Mexican apparel exports entered the US duty-free under USMCA provisions this year, significantly higher than historical utilisation rates of around 80 to 83 per cent. This shows that the agreement remains commercially valuable for manufacturers serving established product categories.

However, the framework now faces an important inflection point as policymakers prepare for the mandatory review of USMCA. Stakeholders warn any weakening of yarn-forward rules or further dependence on Asian textile inputs could reduce the competitiveness of regional supply chains even further. For North American manufacturers, long-term competitiveness is likely to depend less on growing basic apparel assembly and more on developing vertically integrated synthetic fibre production, advanced textile processing and automated garment manufacturing.

Strategy over geography

The latest sourcing patterns suggest that global apparel brands are prioritising capability over proximity. Rather than relocating production to nearby markets, retailers are now favouring countries that offer integrated supply chains, material innovation, competitive costs and manufacturing scale. Vietnam's continued rise shows that industrial depth has become a more decisive sourcing factor than geographic distance.

That leaves the Western Hemisphere with a narrowing window to reposition itself. Without significant investments in synthetic textile infrastructure, automation and regional material ecosystems, the long-anticipated nearshoring wave may remain more aspiration than reality even as global supply chains continue to diversify beyond China. For retailers, the message is clear: resilience today is being built through diversified global sourcing networks, not simply by moving production closer to home.