The story of America’s clothing industry is one of contrast: booming demand from consumers but shrinking capacity at home to produce what they wear. As globalization deepens its hold on the apparel trade, the US garment sector has steadily ceded ground, both in domestic production and global exports, while imports continue to swell.

Domestic output shrinks against the economy’s growth

At the turn of the millennium, US garment exports was a modest yet notable share of the economy which was 0.55 per cent of GDP in 2000. Two decades later that contribution has withered to just 0.21 per cent in 2024.

Table: US garment exports as a per cent of GDP

This decline underscores a broader reality: the US has lost its competitive edge as a garment exporter. Once part of the backbone of America’s manufacturing identity, clothing production has been increasingly sidelined by industries with higher value-add or faster innovation cycles. As per a senior analyst at the US Department of Commerce garment exports tells a bigger story about American industry and that is, they are no longer making clothing for the world. Instead, they are largely consuming what the world makes for the US.

Imports fill the gap

As domestic capacity eroded, imports rose to meet America’s insatiable demand for affordable fashion. The value of apparel brought into the US has more than doubled over two decades, from $46.3 billion in 2000 to $117.5 billion in 2023. Volume tells a similar story. Imports jumped from 22.1 billion square meter equivalents (SME) in 2000 to 39.8 billion SME in 2023.

Table: US apparel imports in value and volume

Source: U.S. Department of Commerce, Office of Textiles and Apparel (OTEXA)

While the dip in 2020 reflects pandemic-related disruptions, the post-pandemic rebound has been dramatic, with imports hitting historic highs. The growing dependency is clear: without foreign producers, US retailers would struggle to stock their shelves.

Why the shift?

Four forces underpin this transformation.

Labor costs: Wages in Asia and other developing regions remain far below US levels, giving overseas producers a decisive edge.

Globalized supply chains: Modern logistics make it seamless for American brands to source garments from multiple countries with efficiency.

Consumer price sensitivity: The appetite for ‘fast fashion’ at low prices drives retailers to prioritize imports.

Branding over manufacturing: US companies are increasingly investing in design, retail and marketing while leaving production to offshore partners.

As an industry consultant says, American apparel brands no longer see themselves as manufacturers. They are curators of lifestyle and identity. The sewing machines are thousands of miles away.

The bigger picture

The interplay between falling exports and rising imports signals a structural redefinition of the US apparel sector. Domestic manufacturing is shrinking not because Americans buy fewer clothes, but because the system that supplies them has been outsourced. The US remains the world’s biggest fashion consumer, but no longer a major maker.

Some niche opportunities remain luxury manufacturing, sustainable local brands, and advanced textile innovation but the long arc points toward continued reliance on international supply chains. In essence, America’s role in apparel has shifted from producer to consumer, mirroring broader trends in manufacturing across multiple industries. As one trade expert put it: “The label may say ‘designed in New York’ or ‘marketed from Los Angeles,’ but increasingly, it reads ‘made in Bangladesh, Vietnam, or China.’ That’s the new reality of American fashion.”

Looking beyond 2030

If current pattern hold, US apparel imports could reach $150-160 billion in value and over 45 billion SMEs in volume by 2030, backed by a mix of rising consumer demand, fast-fashion cycles, and growing dependence on Asian production hubs. At the same time, domestic garment exports as a share of GDP are likely to shrink even further possibly falling below 0.15 per cent by the decade’s end. But there are caveats. Several trends could alter the picture.

Reshoring & nearshoring: Automation, robotics, and trade tensions may push some production back to the US or nearby regions like Mexico and Central America.

Sustainability pressures: Climate-conscious consumers and new regulations could favor shorter supply chains and ethically sourced clothing, offering an opening for US-based manufacturing.

Geopolitical risks: Over-reliance on a few Asian countries could spur diversification, though not necessarily a return to large-scale U.S. garment production.

Still, the structural reality remains. And that is the US is unlikely to regain its former status as a garment powerhouse. Instead, the battle will be over how much of the supply chain risk it can reduce and whether the push for sustainability can carve out competitive niches for local manufacturers. “By 2030, the question won’t be whether America makes its clothes again,” said a trade policy researcher. “It will be whether America can afford the vulnerabilities that come with relying so heavily on everyone else to make them.”