Seismic shakeups have taken place across the global trade landscape over the past year, with geopolitics and see-sawing tariff policy leading to consequences that few could have predicted.​Seismic shakeups have taken place across the global trade landscape over the past year, with geopolitics and see-sawing tariff policy leading to consequences that few could have predicted. 

Seismic shakeups have taken place across the global trade landscape over the past year, with geopolitics and see-sawing tariff policy leading to consequences that few could have predicted.

On “Liberation Day” in April 2025, President Donald Trump imposed radically expansive double-digit duties on trade partners across the globe with the stated goal of rectifying “chronic trade deficits” that “[threaten] our security and our very way of life,” and spurring a reshoring boom. A little over 12 months later, the administration’s IEEPA tariff program has been dismantled, but its impacts are still being strongly felt—just not in the way many American producers expected.

Kearney’s 2026 Reshoring Index, released last week, showed domestic output growth is still in the negative, with 2025 showing little improvement over 2024. More explicitly stated: American producers didn’t benefit from the whipsawing tariff policy changes.

Manufactured goods output in the U.S. dipped slightly by 0.4 percent to the tune of $28 billion. Manufacturing gross output for textiles, fabrics and mill products in particular declined by 4 percent, while apparel fell markedly by 17 percent.

By contrast, combined imports from 14 Asian low-cost countries and regions like China—which were hit with punishing duties designed to ding their influence on the U.S. market—grew 6 percent, or $60 billion.

Tariffs may have prompted trade diversification, but not to the U.S. market or even the Western Hemisphere, according to Dr. Sheng Lu, professor of fashion and apparel studies at the University of Delaware, whose research fueled the latest Fashion Industry Benchmarking Study released by the U.S. Fashion Industry Association.

A record-high percentage of surveyed companies opened up their sourcing to more than 10 countries last year, and almost 60 percent said they plan to source apparel from even more countries moving forward. Even with the push to broaden their portfolios, however, Asia remains a dominant source of U.S. apparel imports.

By value, a whopping 72.6 percent of U.S. apparel imports came from Asia in 2025, up from 71.6 percent the year prior. According to Lu’s research, Vietnam, Bangladesh, Indonesia, India and Cambodia collectively hit a new record, accounting for 50.6 percent of U.S. apparel imports last year, compared to around 37.1 percent pre-Covid. “In other words, due to production capacity constraints, many U.S. fashion companies have been diversifying sourcing within Asia rather than significantly shifting orders to other regions,” he wrote.

“Emerging sourcing destinations like Cambodia, Indonesia or India—they have built capacity and they’re supported by investors from China,” Lu told Sourcing Journal. He believes that’s the reason these countries saw export growth to the U.S. skyrocket last year.

Patrick Van den Bossche, a partner in management consultant Kearney’s Strategic Operations Practice who authored the 2026 Reshoring Index, said “very little capacity has been added” within the U.S. manufacturing sector despite “significant investments… over the past four years” amounting to triple the cash infusions into U.S. industry seen in 2021.

“There were some expectations, and boy, were they blown away,” he told Sourcing Journal. “We would figure by now some of that [investment] should start translating into manufacturing gross output. And then, of course, the tariffs came along, and we thought, ‘It’s really time to turn these things on.’  Lo and behold, that’s exactly what didn’t happen.”

In fact, U.S. manufacturing capacity is being utilized less now than it has been historically. “We’re dropping below 75 percent capacity utilization right now,” Van den Bossche said.

National Council of Textile Organizations (NCTO) president and CEO Kim Glas has also observed the pattern. Global trade has realigned, she said, but she believes China-originating textiles and apparel are still flooding the U.S. market via the Southeast Asian countries that have picked up steam over the past 12 months.

“The result is a deeply distorted market in which subsidized, below-cost products are overwhelming domestic manufacturers and their Western Hemisphere partners,” she said. Forty U.S. textile mills have closed over the past 2.5 years at least in part due to this phenomenon, she believes. NCTO is intent on preserving the 453,122 remaining jobs supported by the industry, which exported $27 billion in fiber, fabric and clothing last year.

According to data from the Office of Textiles and Apparel (OTEXA), there have indeed been marked import shifts between 2024 and 2025 that illuminate the still-growing dominance of Asian producers—even when trade policy should logically support the growth of the Western Hemisphere.

U.S. apparel imports from Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) countries fell 6.7 percent by value and 8.1 percent by quantity year over year. By quantity, apparel imports from Southeast Asian countries positively surged, like Bangladesh (up 12.4 percent), Cambodia (up 35.3 percent), Pakistan (up 15.4 percent), Vietnam (up 12.9 percent), Indonesia (up 13.9 percent) and India (up 4.2 percent).

The value of those apparel imports grew, too—both due to volume increases and the cost of the tariffs—with Bangladesh up 11.7 percent, Cambodia up 27 percent, Pakistan up 10.8 percent, Vietnam up 11.8 percent, Indonesia up 9.7 percent and India up 5.5 percent.

Glas said that many producers understandably believed that given the gap in IEEPA tariff rates between free-trade-agreement qualifying countries in the Western Hemisphere and those in Asia—which amounted by about 10 percentage points in most cases—sourcing from the Americas should have increased.

“You would assume with that differential that you would see more Western Hemisphere sourcing, but we saw a decline,” she said. “Intuitively, you would say, ‘Well, they have higher tariffs—that should deter sourcing from [Asia]; I’d rather mitigate costs and come closer to home and pay a modest 10 percent tariff,’ but that’s not what happened.”

NCTO has lobbied on behalf of targeted tariffs on goods like textiles and apparel in the past, believing that stemming the flow of cheap, Asia-made products could give U.S. producers a leg up.

“When this was first deployed,” she said of the IEEPA tariff policy, “I think intuitively, it was thought that this would lead to more onshoring here in the United States and help protect from some of the worst trade behaviors,” she added. “And yet, in this environment, I think it added fuel to a fire that allowed Asia and China to grow. So tariffs alone are not going to recalibrate all of this.”

NCTO member Bill Rogers, who is the president and CEO of South Carolina-based Mount Vernon Mills, believes the industry needs stability in the form of trade policy “that’s more entrenched legislatively,” rather than established by a stroke of the president’s Sharpie.

The Liberation Day announcement last year kicked off a mad dash by Mount Vernon’s clients—many of which source both domestically and internationally—to “load up on as many imports as they could before the tariffs actually started,” he said.

“You had a big surge of imports that came in during that time, and it really took about six months for a lot of that inventory to burn out,” he added. When it did, the industrial workwear fabric producer saw business pick up a bit, “but then going into ‘26 we’re just seeing a lot of hesitancy from customers; they don’t know which way to turn.”

That’s because of continued shifts in tariff policy, he believes. Now that the IEEPA duties are kaput, the administration has turned to other statutes to implement lower-rate tariffs and launched Section 301 investigations with the aim of levying higher levies soon.

“I think the uncertainty is still got a lot of people paralyzed,” Rogers said. Additionally, he said, countries like India, Pakistan, Bangladesh, China and Vietnam that were hit with high duties tried to absorb the costs in order to remain attractive to customers. “When those tariffs came off,” as they did in February, “that means the gap” in price between U.S. producers and foreign ones “just got wider.”

That spells bad news for U.S. producers trying to woo increasingly cost-conscious brands and retailers.

James McKinnon, CEO of Cotswold Industries Inc. and Central Textiles Inc., which is headquartered in New York with domestic operations in Georgia and South Carolina, said, “I don’t think there’s any doubt that confusion is still a significant part of the sourcing equation today.”

There are “multiple reasons” that the Americas haven’t “taken a bigger slice” of the textile and apparel sourcing pie, he believes.

“The primary one is lack of policy that encourages reinvestment in this hemisphere’s overall footprint—increased fabric availability and needle availability,” he said. Strengthening the Berry Amendment, for one, would create more demand for domestic textiles to clothe military service members, and consequently, American producers could scale their operations.

There are other economic factors at play, too, with labor rates in the Americas far exceeding those of Asian competitors. “That is a definite headwind when it comes to hemispheric opportunities for additional placement of different programs,” he added.

Big retailers and other customers don’t feel comfortable bringing back a large portion of their business to the hemisphere, though there is an interest and an appetite for domestic production, he explained. “When we speak to our retail partners in Texas or Minneapolis or California or New York, they tell us, ‘We’re open to good ideas, but the we have certain constraints that are just economic realities,’” McKinnon said.

“My wish is that the U.S. government would think creatively,” he added. He wants to see the country’s producers develop global reach through a new policy or tariff strategy “to incentivize the use of U.S. inputs,” he said. “Something like, if you purchase U.S. fabrics and make [clothing] in Southeast Asia, [they] would be able to not have a reciprocal tariff.”

Glas, too, believes a different strategy is needed. “What are some other tools in the toolbox that could be utilized right now that helps drive more sourcing here?” she said.

Addressing some of the systemic issues that have undermined the success of domestic industry will amount to more than “a pure tariff number game,” she believes.

Glas has some ideas. She submitted public comments on behalf of NCTO to the office of the U.S. Trade Representative, which held public hearings on the Section 301 investigation into forced labor in supply chains last week. The investigations cover 60 U.S. trading partners.

While Glas wrote that the USTR should indeed impose Section 301 duties on imports of finished textiles and apparel originating from China and South and Southeast Asia countries that utilize forced labor in manufacturing, she also noted other non-tariff considerations that would help the embattled American textile sector.

Preserving the duty-free treatment of textile and apparel products that qualify for CAFTA-DR and the U.S.-Mexico-Canada Agreement, for one. Incentivizing more sourcing from the Western Hemisphere as a whole, and rewarding supply chains that don’t employ forced labor. Creating tariff exemptions for inputs and machinery that textile producers need, which aren’t produced domestically. Strengthening customs enforcement to keep illicit goods out of the country.

“We have to think about the dynamic period of time in which we’re in,” she said. When it comes to U.S. manufacturing renaissance that was promised a little over a year ago, she said, “I think looking at tariff rates is not the only way to look at the issue.”

Seismic shakeups have taken place across the global trade landscape over the past year, with geopolitics and see-sawing tariff policy leading to consequences that few could have predicted.​Seismic shakeups have taken place across the global trade landscape over the past year, with geopolitics and see-sawing tariff policy leading to consequences that few could have predicted. 

Seismic shakeups have taken place across the global trade landscape over the past year, with geopolitics and see-sawing tariff policy leading to consequences that few could have predicted.

On “Liberation Day” in April 2025, President Donald Trump imposed radically expansive double-digit duties on trade partners across the globe with the stated goal of rectifying “chronic trade deficits” that “[threaten] our security and our very way of life,” and spurring a reshoring boom. A little over 12 months later, the administration’s IEEPA tariff program has been dismantled, but its impacts are still being strongly felt—just not in the way many American producers expected.

Kearney’s 2026 Reshoring Index, released last week, showed domestic output growth is still in the negative, with 2025 showing little improvement over 2024. More explicitly stated: American producers didn’t benefit from the whipsawing tariff policy changes.

Manufactured goods output in the U.S. dipped slightly by 0.4 percent to the tune of $28 billion. Manufacturing gross output for textiles, fabrics and mill products in particular declined by 4 percent, while apparel fell markedly by 17 percent.

By contrast, combined imports from 14 Asian low-cost countries and regions like China—which were hit with punishing duties designed to ding their influence on the U.S. market—grew 6 percent, or $60 billion.

Tariffs may have prompted trade diversification, but not to the U.S. market or even the Western Hemisphere, according to Dr. Sheng Lu, professor of fashion and apparel studies at the University of Delaware, whose research fueled the latest Fashion Industry Benchmarking Study released by the U.S. Fashion Industry Association.

A record-high percentage of surveyed companies opened up their sourcing to more than 10 countries last year, and almost 60 percent said they plan to source apparel from even more countries moving forward. Even with the push to broaden their portfolios, however, Asia remains a dominant source of U.S. apparel imports.

By value, a whopping 72.6 percent of U.S. apparel imports came from Asia in 2025, up from 71.6 percent the year prior. According to Lu’s research, Vietnam, Bangladesh, Indonesia, India and Cambodia collectively hit a new record, accounting for 50.6 percent of U.S. apparel imports last year, compared to around 37.1 percent pre-Covid. “In other words, due to production capacity constraints, many U.S. fashion companies have been diversifying sourcing within Asia rather than significantly shifting orders to other regions,” he wrote.

“Emerging sourcing destinations like Cambodia, Indonesia or India—they have built capacity and they’re supported by investors from China,” Lu told Sourcing Journal. He believes that’s the reason these countries saw export growth to the U.S. skyrocket last year.

Patrick Van den Bossche, a partner in management consultant Kearney’s Strategic Operations Practice who authored the 2026 Reshoring Index, said “very little capacity has been added” within the U.S. manufacturing sector despite “significant investments… over the past four years” amounting to triple the cash infusions into U.S. industry seen in 2021.

“There were some expectations, and boy, were they blown away,” he told Sourcing Journal. “We would figure by now some of that [investment] should start translating into manufacturing gross output. And then, of course, the tariffs came along, and we thought, ‘It’s really time to turn these things on.’  Lo and behold, that’s exactly what didn’t happen.”

In fact, U.S. manufacturing capacity is being utilized less now than it has been historically. “We’re dropping below 75 percent capacity utilization right now,” Van den Bossche said.

National Council of Textile Organizations (NCTO) president and CEO Kim Glas has also observed the pattern. Global trade has realigned, she said, but she believes China-originating textiles and apparel are still flooding the U.S. market via the Southeast Asian countries that have picked up steam over the past 12 months.

“The result is a deeply distorted market in which subsidized, below-cost products are overwhelming domestic manufacturers and their Western Hemisphere partners,” she said. Forty U.S. textile mills have closed over the past 2.5 years at least in part due to this phenomenon, she believes. NCTO is intent on preserving the 453,122 remaining jobs supported by the industry, which exported $27 billion in fiber, fabric and clothing last year.

According to data from the Office of Textiles and Apparel (OTEXA), there have indeed been marked import shifts between 2024 and 2025 that illuminate the still-growing dominance of Asian producers—even when trade policy should logically support the growth of the Western Hemisphere.

U.S. apparel imports from Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) countries fell 6.7 percent by value and 8.1 percent by quantity year over year. By quantity, apparel imports from Southeast Asian countries positively surged, like Bangladesh (up 12.4 percent), Cambodia (up 35.3 percent), Pakistan (up 15.4 percent), Vietnam (up 12.9 percent), Indonesia (up 13.9 percent) and India (up 4.2 percent).

The value of those apparel imports grew, too—both due to volume increases and the cost of the tariffs—with Bangladesh up 11.7 percent, Cambodia up 27 percent, Pakistan up 10.8 percent, Vietnam up 11.8 percent, Indonesia up 9.7 percent and India up 5.5 percent.

Glas said that many producers understandably believed that given the gap in IEEPA tariff rates between free-trade-agreement qualifying countries in the Western Hemisphere and those in Asia—which amounted by about 10 percentage points in most cases—sourcing from the Americas should have increased.

“You would assume with that differential that you would see more Western Hemisphere sourcing, but we saw a decline,” she said. “Intuitively, you would say, ‘Well, they have higher tariffs—that should deter sourcing from [Asia]; I’d rather mitigate costs and come closer to home and pay a modest 10 percent tariff,’ but that’s not what happened.”

NCTO has lobbied on behalf of targeted tariffs on goods like textiles and apparel in the past, believing that stemming the flow of cheap, Asia-made products could give U.S. producers a leg up.

“When this was first deployed,” she said of the IEEPA tariff policy, “I think intuitively, it was thought that this would lead to more onshoring here in the United States and help protect from some of the worst trade behaviors,” she added. “And yet, in this environment, I think it added fuel to a fire that allowed Asia and China to grow. So tariffs alone are not going to recalibrate all of this.”

NCTO member Bill Rogers, who is the president and CEO of South Carolina-based Mount Vernon Mills, believes the industry needs stability in the form of trade policy “that’s more entrenched legislatively,” rather than established by a stroke of the president’s Sharpie.

The Liberation Day announcement last year kicked off a mad dash by Mount Vernon’s clients—many of which source both domestically and internationally—to “load up on as many imports as they could before the tariffs actually started,” he said.

“You had a big surge of imports that came in during that time, and it really took about six months for a lot of that inventory to burn out,” he added. When it did, the industrial workwear fabric producer saw business pick up a bit, “but then going into ‘26 we’re just seeing a lot of hesitancy from customers; they don’t know which way to turn.”

That’s because of continued shifts in tariff policy, he believes. Now that the IEEPA duties are kaput, the administration has turned to other statutes to implement lower-rate tariffs and launched Section 301 investigations with the aim of levying higher levies soon.

“I think the uncertainty is still got a lot of people paralyzed,” Rogers said. Additionally, he said, countries like India, Pakistan, Bangladesh, China and Vietnam that were hit with high duties tried to absorb the costs in order to remain attractive to customers. “When those tariffs came off,” as they did in February, “that means the gap” in price between U.S. producers and foreign ones “just got wider.”

That spells bad news for U.S. producers trying to woo increasingly cost-conscious brands and retailers.

James McKinnon, CEO of Cotswold Industries Inc. and Central Textiles Inc., which is headquartered in New York with domestic operations in Georgia and South Carolina, said, “I don’t think there’s any doubt that confusion is still a significant part of the sourcing equation today.”

There are “multiple reasons” that the Americas haven’t “taken a bigger slice” of the textile and apparel sourcing pie, he believes.

“The primary one is lack of policy that encourages reinvestment in this hemisphere’s overall footprint—increased fabric availability and needle availability,” he said. Strengthening the Berry Amendment, for one, would create more demand for domestic textiles to clothe military service members, and consequently, American producers could scale their operations.

There are other economic factors at play, too, with labor rates in the Americas far exceeding those of Asian competitors. “That is a definite headwind when it comes to hemispheric opportunities for additional placement of different programs,” he added.

Big retailers and other customers don’t feel comfortable bringing back a large portion of their business to the hemisphere, though there is an interest and an appetite for domestic production, he explained. “When we speak to our retail partners in Texas or Minneapolis or California or New York, they tell us, ‘We’re open to good ideas, but the we have certain constraints that are just economic realities,’” McKinnon said.

“My wish is that the U.S. government would think creatively,” he added. He wants to see the country’s producers develop global reach through a new policy or tariff strategy “to incentivize the use of U.S. inputs,” he said. “Something like, if you purchase U.S. fabrics and make [clothing] in Southeast Asia, [they] would be able to not have a reciprocal tariff.”

Glas, too, believes a different strategy is needed. “What are some other tools in the toolbox that could be utilized right now that helps drive more sourcing here?” she said.

Addressing some of the systemic issues that have undermined the success of domestic industry will amount to more than “a pure tariff number game,” she believes.

Glas has some ideas. She submitted public comments on behalf of NCTO to the office of the U.S. Trade Representative, which held public hearings on the Section 301 investigation into forced labor in supply chains last week. The investigations cover 60 U.S. trading partners.

While Glas wrote that the USTR should indeed impose Section 301 duties on imports of finished textiles and apparel originating from China and South and Southeast Asia countries that utilize forced labor in manufacturing, she also noted other non-tariff considerations that would help the embattled American textile sector.

Preserving the duty-free treatment of textile and apparel products that qualify for CAFTA-DR and the U.S.-Mexico-Canada Agreement, for one. Incentivizing more sourcing from the Western Hemisphere as a whole, and rewarding supply chains that don’t employ forced labor. Creating tariff exemptions for inputs and machinery that textile producers need, which aren’t produced domestically. Strengthening customs enforcement to keep illicit goods out of the country.

“We have to think about the dynamic period of time in which we’re in,” she said. When it comes to U.S. manufacturing renaissance that was promised a little over a year ago, she said, “I think looking at tariff rates is not the only way to look at the issue.”