The Trump administration’s use of reciprocal tariffs, especially during the U.S.-China trade war, was designed to pressure countries into fairer trade deals and reduce the U.S. trade deficit. For the textiles and apparel sector, these tariffs disrupted supply chains and raised costs for U.S. importers and consumers.

Shift in Sourcing Countries

China’s share of U.S. apparel imports has declined due to tariffs (from over 30% to under 25% by the end of the Trump era). U.S. brands are diversifying to other countries like Vietnam, Bangladesh, and Mexico to avoid high tariffs. However, many of these countries also depend on Chinese raw materials, so indirect exposure to tariffs remains.

Increased Nearshoring

Tariffs, combined with rising wages in Asia and supply chain disruptions (like during COVID), are pushing companies to consider nearshoring to Central America (e.g., Honduras, Guatemala) or reshoring small-scale manufacturing to the U.S. But full reshoring is still limited due to higher labor costs and infrastructure gaps.

Potential Return of Tariffs Under Similar Policies

If similar trade policies return (under a future Trump or Trump-aligned administration), we could see:

• Expanded tariffs on more products
• More aggressive “Buy American” incentives
• Higher costs for both manufacturers and consumers in the short term
• Possibly stronger domestic textile production in the long term if incentives align

Companies might invest more in automation, sustainable materials, or “made-to-order” tech to bring back some manufacturing. However, this transition would take time and investment support.

As of recent data, approximately 97% of textiles and apparel sold in the USA are manufactured overseas.This heavy reliance on foreign production is due to lower labor costs in countries like China, Vietnam, Bangladesh, and India, which dominate global textile and garment manufacturing. Only about 3% of clothing purchased in the U.S. is actually made domestically, a figure that has remained fairly consistent in recent years.

If reciprocal tariffs return or expand, overseas manufacturing will remain dominant, but we’ll likely see:

·       More regional diversification

·       Gradual nearshoring

·       Higher apparel prices

·       Possibly mild growth in U.S.-based production for niche or high-tech markets

Top Countries Manufacturing Textiles & Apparel for the U.S.:

1. China, Still the largest supplier, though its share has declined due to tariffs and sourcing diversification. Accounts for around 24–30% of U.S. apparel imports by value.
2. Vietnam, Rapidly rising and now the second-largest supplier. Supplies about 15–18% of U.S. apparel imports, Considered more stable politically and cost-effective than China.
3. Bangladesh, Known for high-volume, low-cost garment production. Supplies roughly 8–10% of U.S. apparel imports.
4. India, Major player in both textiles and garments, especially cotton-based products. Accounts for about 5–7% of apparel imports.
5. Mexico, Key partner under USMCA (formerly NAFTA). Benefits from proximity and faster shipping. Supplies around 4–6% of U.S. apparel imports, and growing.
6. Indonesia, Cambodia, and Honduras, Each contributes 2–5%, depending on the year and product type.

Statistics and trends regarding the U.S. textiles and apparel industry:

Import Trends:

2024 Import Volume: The U.S. imported approximately 106.6 billion square meter equivalents (SME) of textiles and apparel in 2024, marking a 15.2% increase compared to 2023. ​ 

Leading Suppliers: China remains the largest supplier, accounting for 34% of U.S. apparel imports by quantity and 18% by value as of May 2024. Vietnam, Cambodia, and Bangladesh have also seen notable increases in their export volumes to the U.S. ​ 

Export Trends:

2024 Export Volume: U.S. exports of textiles and apparel declined by 2.15% in 2024, totaling 2.15 billion kilograms. ​ 

Market Dynamics:

Tariff Impacts: In 2025, the U.S. imposed new tariffs on textiles and apparel imports, with rates up to 60% on goods from countries like China, Vietnam, Cambodia, Bangladesh, and Indonesia. These tariffs are expected to increase consumer prices for clothing and footwear. ​ 

Retailer Responses: Major retailers, including Nike, Gap, and Lululemon, which heavily rely on Asian manufacturing, may pass increased costs onto consumers due to these tariffs. ​ 

Domestic Industry Overview:

2023 Shipments: The value of U.S. man-made fiber, textile, and apparel shipments was estimated at $64.8 billion in 2023, down from $67.4 billion in 2022. ​ 

Global Position: The United States is the second-largest individual country exporter of textile-related products globally. ​ 

Analyst reviews and studies on the impact of reciprocal tariffs in the textiles and apparel sector indicate several key trends and predictions:​

Limited Effectiveness in Reducing Trade Deficits: Research by BBVA suggests that U.S. reciprocal tariffs are unlikely to significantly reduce trade deficits with Asian economies. Trade imbalances are primarily driven by factors such as comparative advantages, supply chain dynamics, and production costs, rather than tariff rates. ​

Reciprocal Tariffs & Trade Deficit: Limited Effectiveness

• According to BBVA Research, reciprocal tariffs imposed by the U.S. have not effectively reduced trade deficits with Asian countries.
• The core issue lies in comparative advantages, where countries like China and Vietnam maintain dominance due to lower production costs, established infrastructure, and economies of scale.
• Even with tariffs, U.S. importers are often forced to rely on foreign suppliers because of the lack of domestic alternatives at scale.

Disruption of Global Supply Chains: The imposition of tariffs has disrupted established supply chains, prompting U.S. companies to seek alternative sourcing options. This shift has led to increased transportation costs and complexities in building new supplier relationships. ​

Supply Chain Realignment & Cost Pressures

• Global supply chains have been significantly disrupted. Companies have been rerouting production away from China to avoid high tariffs.
• Countries like Vietnam, Bangladesh, and Cambodia have absorbed much of this shift, but their capacities are also being strained.
• The shift has led to: Higher production and logistics costs. Longer lead times. Reduced supply chain flexibility.
• This is particularly challenging for fast fashion and seasonal retail businesses that rely on rapid turnaround times.

Job Losses and Economic Impact: Studies estimate significant job losses across various sectors, including retail and manufacturing, as businesses grapple with increased costs and reduced consumer spending. ​ 

Increased Costs for U.S. Consumers and Businesses

• Tariffs on Chinese textiles and apparel—sometimes exceeding 25% to 60%—have translated into higher prices for finished goods.
• Major U.S. brands such as Nike, Gap, and Lululemon have publicly acknowledged rising sourcing costs, some of which are passed onto consumers.
• Retail margins are getting squeezed, especially for mid-sized and smaller brands without the scale to absorb costs or pivot supply chains quickly.

Economic & Employment Impact

• Analysts warn of negative effects on U.S. employment across manufacturing, logistics, and retail.
• Jobs in the garment distribution and fashion retail sectors are vulnerable as companies cut costs or automate processes to cope.
• In some regions, the "reshoring" narrative is not matching reality, as labor costs and compliance costs in the U.S. remain too high for mass-scale production.

Opportunities for Competing Economies: Tariff escalation creates opportunities for other countries. For instance, the European Union could gain greater access to lower-priced imports from China and receive preferential treatment in both U.S. and Chinese markets. ​ 

Global Winners: Diversified Exporters

• As China’s share of U.S. textile and apparel imports declines, countries like: Vietnam – now one of the top exporters to the U.S. Bangladesh, India, and Indonesia – have all gained U.S. market share.
• These shifts reflect a "China" strategy, where U.S. buyers continue to work with Chinese firms while building parallel sourcing networks elsewhere.

Impact on U.S. Textile Exports: The tariff war is projected to increase production costs of 'Made in the USA' textiles, resulting in a decline in U.S. textile exports due to reduced price competitiveness. ​ 

Geopolitical and Competitive Considerations

• The U.S. strategy of unilateral tariff escalation could place it at a competitive disadvantage globally.
• Analysts from the U.S. Fashion Industry Association (USFIA) suggest that:

The EU and other economies might benefit from more stable trade terms with China and lower production costs. U.S. companies could lose out to international brands in both domestic and global markets due to higher input prices and reduced competitiveness.

Potential Gains for Other Textile Exporters: Countries like Vietnam have emerged as beneficiaries, with Vietnam surpassing China as the largest textile exporter to the U.S. in early 2024. ​ 

• Long-term reshoring of U.S. apparel production remains unlikely unless accompanied by major innovation (e.g., automation, on-demand manufacturing).
• The “reciprocal tariffs” policy could see a resurgence under similar political leadership (e.g., a future Trump administration).
• Analysts expect continued volatility in sourcing strategies, rising pressure for supply chain diversification, and potential growth in regional trade blocs (e.g., USMCA, ASEAN partnerships).

Reciprocal tariffs on textiles and apparel may serve political goals but come with economic costs. They have: Disrupted supply chains, increased prices and caused uncertainty in trade relationships. Shifted the sourcing landscape in favor of countries like Vietnam and Bangladesh

Without significant domestic investment and innovation, the U.S. is unlikely to replace foreign suppliers, and the textile and apparel industry will remain globally interdependent.

In summary, analysts predict that reciprocal tariffs in the textiles and apparel sector may not achieve the intended reduction in trade deficits and could lead to supply chain disruptions, economic losses, and shifts in global trade dynamics.

For more detailed and current data, the U.S. Department of Commerce's Office of Textiles and Apparel (OTEXA) provides comprehensive monthly reports on textile and apparel imports and exports.

Source Summary

1.        BBVA Research. Asia: US Reciprocal Tariffs Offer No Help in Narrowing Trade Deficits with Asian Economies. https://www.bbvaresearch.com

2.        Fashionating World. US Tariffs on China: A Tangled Thread in the Global Textile & Apparel Industry. https://www.fashionatingworld.com

3.        Fashionating World. The US Fashion Industry Braces for Impact as Tariffs on Chinese Imports Loom. https://www.fashionatingworld.com

4.        Just-Style. China Tariff War: The Impact on US Textiles and Apparel. https://www.just-style.com

5.        US Fashion Industry Association (USFIA). Waging a Global Trade War Alone: The Cost of Blanket Tariffs on Friend and Foe. https://www.usfashionindustry.com

6.        Local & Global Economics. US-China Trade War: Which Country Will Gain the Most in the Textile Sector? https://localandglobaleco.com