The global fashion sourcing landscape is being redrawn as the industry contends with an enduring truth: tariffs dictate the rules, shaping both where the world’s clothing is made and how much it costs.
Policy remains in constant flux. On February 20, the Supreme Court overturned a series of broad tariffs imposed by President Trump, ruling he overstepped his authority by using an old law—the International Emergency Economic Powers Act (IEEPA)—to levy reactive, punitive duties on trade partners. However, before companies could even consider the possibility of refunds, Trump responded almost immediately with a new 10% tariff on all countries, effective February 24 and lasting 150 days. The President has threatened to raise this Section 122 import surcharge to 15%, though that has not yet happened.
This ruling addressed the Trump Administration’s modern trade war, a hallmark of his second term where tariffs became the weapon of choice. New duties spread across countries targeted for trade imbalances, forcing fashion brands to rapidly accelerate their supply chain diversification efforts—shifting from a strategic advantage to an urgent necessity almost overnight.
Given these developments, it’s clear that neither the costs nor the market volatility are easing. The ripple effects through supply chains signal a fundamental shift in fashion’s manufacturing geography, with a new post-trade-war map starting to take shape.
Tariffs have “thrown the global sourcing map into turmoil,” says Nate Herman, executive vice president of the American Apparel & Footwear Association (AAFA). “It’s called into question bets and longstanding efforts towards diversification.”
While not the only target, China has borne the brunt of the administration’s tariff measures, with duties climbing as high as 145% last April. Today, importing $100 worth of men’s cotton T-shirts from China into the U.S. would cost a brand $184 in duties and taxes, according to Flexport’s Tariff Simulator. This includes the standard 32% duty for that category, the 7.5% Section 301 duties from Trump’s first term, and the new 10% Section 122 duty. The same order would cost about $176 from nearly anywhere else, as the Section 301 duties apply specifically to China. The Supreme Court’s recent ruling removed all IEEPA tariffs, including the 10% global tariff and country-specific duties that reached up to 25%. Before these additional tariffs, that $100 T-shirt order would have cost $132 to import from any of these countries.
Now, as some countries face tariff rates similar to China’s, Herman notes that companies are questioning whether reducing or leaving production in China was the right decision. “What happened last year wasn’t just about China, it was about all countries,” says Angela Lewis, global head of customs at Flexport. It seems no move was definitively the “right” one. So, where does this leave fashion’s production map?
Where Fashion Is Being Made
Fashion companies are naturally relocating manufacturing to soften the blow to their profits. But where are they going?
Cambodia is emerging as a key winner, says Herman. “They were already doing well, even before President Trump started imposing new tariffs, and that’s across the board—clothes, shoes, accessories—despite the fact that they have a similar level of tariff as all their neighbors.”
From Lewis’s perspective, she has observed more Chinese companies establishing operations in lower-cost Southeast Asian countries like Cambodia and Vietnam. This indicates that diversification efforts are not limited to companies outside China.However, Chinese manufacturers themselves are feeling the shift. In just the past year, China’s share of U.S. apparel imports by volume has fallen from 36% to 28%. In contrast, Cambodia’s share grew by over 35%, and Pakistan saw a 20% increase, marking the strongest growth among America’s top ten clothing suppliers. Vietnam, now the second-largest apparel supplier to the U.S., accounts for nearly 19% of total imports, narrowing a gap with China that once seemed insurmountable.
“For the first time ever, U.S. apparel imports from Vietnam by dollar value have actually surpassed those from China,” says Herman. “That was never even close before.” Over the past year, Vietnam overtook China as the largest apparel supplier to the U.S. by import value, accounting for 21% of U.S. spending on clothing imports, compared to China’s 14%. In 2024, China held 21% of U.S. apparel import value, while Vietnam accounted for 19%.
Looking back to 2016, it’s a year China might now view with nostalgia. At that time, China represented 41% of U.S. apparel imports, while the next largest supplier, Vietnam, accounted for just 12%.
Bangladesh remains the third-largest clothing supplier to the U.S., with exports growing nearly 16% last year. However, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), half of its export production goes to the EU—a share that could keep rising due to duty-free access under the Everything But Arms (EBA) scheme. The country’s election on February 12 may also boost apparel production, as the new administration’s manifesto includes plans to strengthen and diversify Bangladesh’s industrial sector. “With apparel making up over 80% of our total exports, we expect the industry to see sustained growth in the coming years,” says Mostafiz Uddin, owner of Denim Expert Ltd.
Egypt, Jordan, and Pakistan have also been “really big winners” in U.S. apparel sourcing, according to Herman. Egypt and Jordan benefit from the Qualified Industrial Zones (QIZ) program, which allows duty-free entry for garments and textiles to the U.S. provided they incorporate a certain level of inputs from Israel. “Suddenly, a lot of companies are returning to these countries, especially for garments—not shoes or accessories,” Herman notes.
U.S. clothing imports from Egypt grew 12% last year, though Egypt still accounts for less than 2% of total U.S. apparel imports. Yet the growth potential is significant, says Eugene Havemann, founder and CEO of Atlas Apparel, a new knit manufacturer establishing vertical sourcing in Egypt to seize the opportunity.
“There are so many opportunities,” he says. “If you understand the U.S. market and its needs, you can structure your offering to solve many of the challenges buyers face now that they can no longer source smaller quantities from China or get the short lead times that only China used to provide. Egypt is evolving to offer those solutions.” Havemann compares Egypt’s current moment to Bangladesh in the mid-1980s, when the right mix of trade agreements, low-cost labor, and an available workforce fueled a factory boom. Perhaps even more importantly, in an era where politics heavily influences tariffs, U.S.-Egypt relations are “on the friendlier side,” and Havemann does not expect the QIZ agreement to be altered or removed.
Predicting trends has become difficult, and factories must be more agile than ever. For MAS Holdings, a major South Asian apparel manufacturer operating in 14 countries, deciding where to expand has been a constant challenge, says Brad Ballenti.I am the CEO of MAS Acme USA, the strategic arm of our parent company. When India faced a 25% tariff on apparel shipped to the US last year, we had to pivot. We began focusing more on our European partners because the EU trade deal was extremely favorable. Previously, India paid duties of 9% to 12% to export clothing to the EU, but the agreement reached in January is expected to eliminate those tariffs entirely. The US also signed its own trade deal with India this month, which could lead to imports growing beyond last year’s 7% increase.
Recent trade developments are reshaping global sourcing. A US-Taiwan trade deal was signed, and programs like the African Growth and Opportunity Act (AGOA) and Haiti’s HOPE/HELP were extended for another year. However, the EU has paused its trade deal in response to Trump’s new 15% tariff, adding further uncertainty.
Is nearshoring the solution?
For the fashion industry, nearshoring has become a critical discussion. Tariffs have turned geography into both a risk and a cost factor, directly impacting margins, speed, and survival. The idea was that producing closer to home would save on shipping, reduce political and trade volatility, and leverage beneficial trade agreements between neighboring countries.
However, Central America has taken a significant hit, unlike the growth seen in Asia. The CAFTA-DR agreement was designed to phase out duties for free trade with the US between 2006 and 2009, but these countries were hit with a 10% reciprocal tariff last year. Under the new global 10% rate, their tariffs remain unchanged. Honduras saw its exports to the US drop by over 17%. While the US reached agreements with El Salvador and Guatemala to lift the 10% tariff, it’s unclear how soon this will happen or if it will boost fashion manufacturing there significantly.
Sourcing trends vary by product. For men’s cotton T-shirts, the top US trading partners are Nicaragua, Honduras, Jordan, Haiti, and China. Women’s jeans mainly come from Vietnam, China, Bangladesh, Pakistan, and Cambodia. Men’s wool sweaters favor China, Italy, Macao, Vietnam, and Cambodia, while women’s leather shoes arrive from Italy, Spain, Brazil, Vietnam, and China.
Nearshoring has benefited some companies manufacturing in Mexico, where apparel exports to the US grew over 9% last year. The Latin American market, especially in Mexico, is expected to continue growing for apparel, but a significant return of US manufacturing is not anticipated.
Trump’s tariffs aimed to boost US manufacturing, but this hasn’t materialized. There’s been little investment because factories, labor, and necessary machinery—largely sourced from China—are lacking, and tariffs make equipment more expensive. A $300,000 machine could cost an extra $30,000, causing many companies to pause expansion plans.
Only about 3% of US apparel is made domestically. Even if that doubled, it would still only be 6%.The industry is interested, but we’re not seeing half of it moving back here or anything close to that. According to Herman’s estimates, reaching even 6% would take at least 10 to 15 years.
How Tariffs Have Impacted Big Brands
Peter Charles. Photo: Courtesy of Tapestry
A Q&A with Tapestry Chief Supply Chain Officer, Peter Charles
Vogue Business: How have recent tariff changes influenced where and how you source your products?
Peter Charles: Looking back, we were one of the first companies to de-risk from China before it was even a common practice. We began diversifying across multiple countries back in the early 2000s, and that effort has accelerated over the last decade, especially during Covid. The strategy we had in place before the pandemic helped us navigate that massive disruption. So when “Liberation Day” arrived in April, it was about continuing to ensure we didn’t have to worry about single points of failure.
For several years, our major business strategy has focused on quality and supply security—these two elements are the most important for our brands and products.
Vogue Business: What does your sourcing map look like now, and which regions have become more attractive due to tariff pressures?
Our largest sourcing country accounts for about 30% of our total, though ideally we’d like to be closer to 25%. Like many in our industry, we primarily manufacture in Southeast Asia, and we’re working across nine countries in Southeast Asia and the Indian subcontinent to drive that strategy.
Less than 6% of our finished goods come from China, so it’s a very small part of our business. For raw materials, we still have a significant presence in our Tier-2 supply base in China, though we’re constantly looking to reduce risk amid geopolitical challenges. China remains an important market and a high-quality manufacturing hub for the components we need.
In terms of general trends, I think Vietnam and Cambodia—due to population size and cost structure—will likely become slightly less significant for us over a five-year horizon.
Photo: Courtesy of Tapestry
We believe Indonesia, as a manufacturing hub for leather goods, is a real opportunity, and we’re looking to build our business there. It has a rich history in apparel and footwear manufacturing, so there’s good DNA there for the skills and products we need. We are strategically investing in that.
Vogue Business: Have tariffs changed how you think about long-term supplier relationships versus short-term agility?
Tariffs did not change the nature of our relationships with individual suppliers. For example, when we recently faced a situation in India, we diverted some of our Indian-made products to international markets rather than drop that vendor. We have long-standing relationships in these countries, so we simply pivoted. This goes back to some of our structural advantages, including more flexibility in how we move inventory between the country of origin and the destination. These situations have allowed us to ride out what are frankly temporary disruptions, as the rules continue to change.
Vogue Business: What’s the biggest myth about how tariffs affect fashion sourcing?
That it’s only about cost. Everyone has been so focused on the cost implications for companies, importers, brands, retailers, and ultimately consumers—since some of this cost is passed on. There’s been a lot of conversation about mitigating those costs. But for many companies running professional supply chains today, diversification continues to be just as important as solving the short-term cost problem. For us, we haven’t really let the short-term cost…Litigation issues distract us from our long-term strategic ambitions as a company.
How Tariffs Have Impacted Small Brands
Like Tapestry, Ralph Lauren has been well-positioned to weather the trade war because no single country accounts for more than 20% of its production. The company sources from countries including China, India, Italy, and the US. According to Ralph Lauren’s chief product and merchandising officer, Halide Alagöz, their ability to navigate today’s challenges “reflects years of deliberate work to build a diversified and flexible supply chain.”
Smaller brands aren’t in the same position. For A.Potts, which showed its new fall collection during New York Fashion Week in February, tariffs have significantly changed the business.
The label was producing its line between New York and the Dominican Republic, with most fabric still coming from Asia. When the tariffs hit, the added costs made sourcing from Asia prohibitive. This forced A.Potts to source more from the Dominican Republic and opt for different fabrics from a local vertical supplier. Designer Aaron Potts says that for about a month at the start of the year, even e-commerce sales were paused while he plotted “a workaround.”
A look from the A.Potts Fall 2026 ready-to-wear collection features a sweater/scarf combo made in Peru when sweater production in China was held up over tariffs.
Photo: Ned & Aya for A.Potts
“I had sweaters coming out of China, and one day the tariffs were one thing, and the next day it was something else,” says designer Aaron Potts. “Sometimes the tariff was so expensive it affected our deliveries.” But a small fashion business in the current market can’t absorb those added costs alone. “That’s the problem with these tariffs; it’s like dominoes, it affects everyone on every level. Everyone is losing money, everyone is losing business… it’s making everyone’s prices go up,” he says.
Given the current challenges in the industry and the broader economy, A.Potts is introducing more accessibly priced items, like tees and sweatshirts printed with his sketches, to live alongside the main collection. Potts says the tariffs actually introduced new elements that worked for the brand. “It helped me broaden my vision of what A.Potts could actually be, and having that slightly more casual aspect to the collection is good.”
Where Fashion Goes From Here
This year, while less turbulent than 2025 regarding new tariffs, retail costs are still expected to rise. Brands have tried everything to avoid passing costs onto consumers—from shipping orders ahead of tariff deadlines, to using stockpiled fabric, to requesting supplier discounts or finding greater supply chain efficiency—but are now out of options. According to Uddin, the pressure is mounting everywhere, with some brands absorbing the tariffs and others pushing manufacturers like him to bear the full cost.
Companies across fashion’s supply chain simply “can’t hold the line anymore,” says Herman.
“The costs are just going to be there,” he says. “They can no longer be borne by the importer alone. Those costs are going to have to be shared with the consumer and others going forward because there is nowhere to go to avoid them.”
As long as uncertainty rules fashion, where companies source clothes will continue to shift, as will their product mix, as they determine what’s really worth making. Flexport’s Lewis believes this reality will mean consumers see fewer products in stores, as companies become more strategic about what they source.
In Herman’s words, fashion is “undergoing a generational change,” and it’s unclear what the industry map will look like when it emerges from this era.
“The beauty of our industry is that there’s always been a low barrier to entry. Anybody could start producing things in their garage, sell to a local boutique, and go from there,” Herman says. “But with the complexity of modern trade and sourcing…”The current regulatory environment is stifling innovation and discouraging new designers, who have long been the lifeblood of the fashion industry’s creativity.
Frequently Asked Questions
FAQs How Tariffs Redefined Global Fashion
Beginner Definition Questions
What exactly is a tariff in fashion
A tariff is a tax that a government places on imported goods like clothing or fabric In fashion it makes foreignmade items more expensive to bring into a country
How can a simple tax change the entire fashion industry
Because fashion is a global business Designers source fabric from one country manufacture in another and sell worldwide Tariffs increase costs at any of these points forcing brands to change where they make clothes what materials they use and how much they charge you
Whats the difference between a tariff and a trade war
A tariff is a single policy A trade war happens when countries repeatedly impose tariffs on each others goods in retaliation creating a cycle that massively disrupts global supply chains
Impact Changes
How have tariffs changed where my clothes are made
To avoid high tariffs many brands have shifted production out of countries targeted by taxes and into countries with trade agreements This is often called supply chain diversification
Why are some brands now talking about nearshoring
Nearshoring means moving production closer to the consumer market Tariffs and shipping delays make distant factories less attractive so brands look for speed and stability closer to home
Have tariffs made my clothes more expensive
Often yes Brands frequently pass some or all of the increased tariff costs onto consumers through higher retail prices You might notice it most on items like handbags shoes and denim
Did tariffs help bring clothing manufacturing back to the US
It spurred some reshoring but not a massive boom US manufacturing is more expensive due to labor costs Tariffs made imports costlier making domestic production relatively more competitive for some brands especially for highend or quickturnaround items
Brand Consumer Strategies
How do big fashion brands deal with tariffs
They use a mix of strategies absorbing costs raising prices shifting production countries redesigning products to use cheaper or tarifffree materials and lobbying governments for exemptions
What can I do as a shopper to avoid tariffrelated price hikes
Look for brands that manufacture within their