On a 31 December deadline, Fibre2Fashion reports on tariffs' effect in 2025.
December 31, 2025
A US Fashion Industry Association study found that tariff policies could not inspire US fashion companies to up domestic sourcing. Seventy per cent of companies surveyed delayed or cancelled sourcing orders due to tariff hikes. Adjusting procurement networks emerged as the most commonly adopted tariff mitigation strategy, with more than 80 per cent of companies diversifying their production footprint to other countries and regions. Around 44 per cent companies desired to expand sourcing from the Western Hemisphere, while 17 per cent planned to source more ‘Made in the USA’ apparel and textiles.
In reality, higher tariffs directly disadvantaged US-based production. The US garment manufacturing companies depend on yarns, fabrics, and zippers from other countries. Because of tariffs driving up the cost of these raw materials, domestically produced apparel will lack price competitiveness. US fashion brands shifting production to the Western Hemisphere is not a practical alternative either as Asia continues to be a relatively dominant apparel sourcing base for them. Compared to key Asian suppliers, US domestic suppliers lag in product diversity, agility, flexibility, and vertical integration—the vital factors for US fashion companies. Add to that, the current state of US textile production remains a major barrier to domestic sourcing. Between January and July, US production of textiles such as fibres, yarns and fabrics, decreased by 6.2 per cent, while US apparel production fell by 4.3 per cent. The shrinking pool of overall sourcing also hinders orders for US-based producers, which account for less than 10 per cent of a typical fashion company’s sourcing footprint. Challenges also exist for US fashion brands attempting to source ‘sustainably’ from domestic suppliers. Although most companies are likely to source clothing made with sustainable textiles in the US, including recycled, organic or regenerative materials, new infrastructure investments are needed urgently to up production capacity.