On a 19 August deadline, Modaes reports on recent findings on the effects of tariff hikes on local output from USFIA's Benchmarking Survey 2026:
Pablo Bueno | August 19, 2026
Tariffs are shaping the strategies of U.S. companies, but the return of production to the United States remains minimal. They are hurting the bottom line for 85% of companies, and 74% are facing higher procurement costs.
U.S. tariffs are not leading to a massive return of fashion production to the country. Only 10% of U.S. companies surveyed by the United States Fashion Industry Association (USFIA) report that they have increased their sourcing of “Made in USA” products in response to the tariff hikes. This finding reinforces one of the main conclusions of the 13th edition of the Fashion Industry Benchmarking Study: protectionism is disrupting supply chains, but it is not leading to a significant reshoring trend.
The impact of tariffs, however, is directly affecting companies’ bottom lines. Eighty-five percent of respondents say that tariff increases have harmed their companies’ finances, up from 78% the previous year, while 74% report having incurred higher procurement costs as a result, up from 72% in 2025. The study also notes that various research studies estimate that the decline in annual gross margins for U.S. fashion companies since 2025—due to increased tariffs and sourcing costs—ranges from 120 to 360 basis points.
Companies’ strategy is thus shifting toward managing the impact of tariffs rather than moving manufacturing to the United States. Among the main responses are applying for tariff refunds, using the “first sale” doctrine, renegotiating contracts with suppliers, and diversifying sourcing. At the same time, more than half of respondents say that tariffs have reduced the resources available for other areas considered critical, such as sustainability and product innovation, compared to 39% in 2025.
56% of the companies surveyed by USFIA report sourcing from the United States in 2026, compared to 40% in 2025 and 2024
There is an increase in domestic sourcing, but the study itself qualifies its scope. 56% of the companies surveyed report sourcing from the United States in 2026, compared to 40% in 2025 and 2024. However, all of these companies also purchase from more than ten countries, and U.S. products account for less than 10% of their total procurement volume or value. USFIA concludes that the increase in domestic sourcing should be interpreted as one component of a diversification strategy, rather than as a substitute for imports or a return of production to the country.
Nor is this trend limited to the United States. Companies are maintaining a geographically diversified network while focusing their relationships on strategic suppliers capable of offering flexibility, production capacity, and regulatory compliance. In 2026, the companies participating in the study report sourcing from 49 countries, up from 46 in 2025, and 65% of companies with more than 1,000 employees purchase from at least ten markets.
Rather than moving production to the U.S., companies are managing tariffs by requesting refunds, renegotiating contracts, and diversifying their suppliers
As part of this strategy, nearshoring and the Western Hemisphere are gaining ground, although they still face limitations compared to Asia. Seventy-six percent of respondents report sourcing from CAFTA-DR countries (up from 64% in 2025), and the percentage sourcing more than 10% of their products from this region has risen from 14% to 24%. The advantages of geographic proximity, lower compliance risk, and trade agreements partially offset higher sourcing costs and reduced production flexibility.
The shift in strategy also reflects the fact that companies have stopped simply seeking new countries to replace previous ones. The report notes that, looking ahead to the next two years, U.S. companies plan to place greater emphasis on supplier consolidation, strategic alliances, and operational resilience than on continuing to expand the number of markets and suppliers. The goal is to maintain geographic diversity while working more closely with partners considered strategic.
Tariff policy remains, in fact, the primary business challenge for the U.S. fashion sector in 2026. And companies do not appear to view increased trade protection as the solution to their competitiveness issues: 100% of respondents support exempting textile and fashion products from new tariff increases, as well as maintaining the United States-Mexico-Canada Agreement (USMCA) and establishing incentives to boost textile and apparel production in the Western Hemisphere.