On a 11 August deadline, Fashion Network reports on rising protectionism and its effect on sourcing.
Matthieu Guinebault | August 11, 2026
Protectionist US trade policies and tariff uncertainty are the leading concern for 92% of sector decision-makers, according to the thirteenth annual study by the United States Fashion Industry Association and the University of Delaware.
The survey covered executives at 30 US-based fashion companies- 80% retailers, 65% brands, and 55% importers or wholesalers- with 80% employing more than 1,000 people. The findings point to a strained business climate.
In response to inflation, tighter controls on forced labour and higher sourcing costs, executives say they are refocusing their sourcing strategies on consolidating supplier networks and optimising regulatory compliance. The financial impact of the tariff measures proposed by Donald Trump for 2025 is reported to have intensified in recent months. Despite the Supreme Court ruling that invalidated the 'Liberation Day' tariffs, the average customs duty applied to US clothing imports still stood at 21.6% in May, up from 15.2% in January. This tariff pressure is reported to be eroding profits at 84.2% of the companies surveyed and pushing up sourcing costs for 73.7% of them.
Industry studies further indicate annual gross margin erosion of between 120 and 360 basis points, or 1.2% to 3.6%. Meanwhile, rising consumer prices are affecting 57.9% of respondents, while 52.6% report a reduction in resources allocated to product innovation and sustainability. “Protectionist policies and regulatory uncertainty remain the primary operational obstacle for our industry,” says Julia K. Hughes, president of the United States Fashion Industry Association. “Brands are focusing on preserving their geographical diversity whilst streamlining their supply chains to collaborate more closely with strategic partners.”
Despite these constraints, employment is set to remain buoyant in the US textiles and clothing sector. Indeed, 87% of companies plan to increase their workforce over the next five years, matching the highest level recorded since the pandemic. Hiring is focused on data scientists for 73% of respondents, trade compliance specialists for 60% and environmental sustainability managers for 53%. Meanwhile, staffing levels in garment manufacturing are expected to rise among 38% of companies, driven in particular by the growth of repair services.
Even so, five-year optimism stands at 62.5%, the lowest level recorded since the survey began.
Geographical reconfigurations and de-risking
In sourcing terms, the industry’s supply base now spans 49 countries. Asia retains its dominance, accounting for 70.8% of the value of clothing imports in the first five months of 2026, although China’s share has fallen to 9.7%- below Vietnam’s 22.2% and Bangladesh’s 11.3% for the first time.
Only 12% of companies source more than 30% from China, with most keeping the country’s share below 10%. Players are seeking a more balanced regional mix. Latin America is gaining ground, with 76% of companies utilising the free-trade agreement linking the US to the region- driven by Guatemala and El Salvador- whilst 50% of respondents are making use of the free-trade agreement with Mexico.
In terms of purchasing volumes, 73% of companies anticipate an increase in the value or volume of their clothing sourcing this year. The growth remains modest, however, with 57.9% of executives expecting an increase of between 1% and 5%, whilst fewer than 6% forecast growth of more than 10%. At the same time, only 10% of respondents are considering bringing production back to the US to counter customs barriers, underscoring the limitations of ‘reshoring’ given the complexity of international value chains.
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