Fashion’s global sourcing map has rewritten itself as the industry continues to grapple with a nagging reality: tariffs rule, and the world’s clothing — both where it’s made and what it costs — is at their mercy.
Policy is also ever-changing. On February 20, the Supreme Court overturned a set of President Trump’s sweeping tariffs, ruling that he exceeded his authority by using a decades-old law, the International Emergency Economic Powers Act (IEEPA), to impose reactive and punitive duties on trade partners. But before companies could even consider celebrating the prospect of refunds, Trump responded almost immediately with a 10% tariff on all countries that took effect on February 24 and will remain in place for 150 days. The President has threatened to raise that Section 122 import surcharge tariff to 15%, but that hasn’t materialized yet.
The ruling was in response to the Trump Administration’s new-age trade war that has defined his second term, featuring tariffs as the weapon of choice. New duties spread across countries targeted over trade imbalances, forcing fashion brands to accelerate supply chain diversification efforts that evolved from good-to-have to urgently necessary nearly overnight.
Friday’s Supreme Court ruling struck down President Trump’s emergency tariffs, but within hours, the administration pivoted to new legal tools. For fashion, the mechanism has changed but the volatility hasn t.
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Given the latest tariff news, it’s clear neither the costs nor volatility are abating. And the knock-on effect of what has happened in supply chains represents a fundamental reordering of where fashion will be made, with the new post-trade war map beginning to emerge.
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.”
Though not the only one, China has been the biggest target of the administration’s tariff ire, with duties climbing as high as 145% in April last year. Today, bringing $100 worth of men’s cotton T-shirts from China into the US would cost a brand $184 in duties and taxes after the standard 32% duty for that product category, the 7.5% Section 301 duties that emerged during Trump’s first term, and the new Section 122 10% duty, according to supply chain management company Flexport’s Tariff Simulator, a tool that lets importers calculate customs fees, duties and real-time tariffs by HTS product code. The same order would cost $176 to place nearly anywhere else, as the 301 duties are specific to China. The Supreme Court’s recent ruling removed all IEEPA tariffs, including the 10% all country tariff and the country-specific duties that were as high as 25% in some cases. Before any of these additional tariffs, that $100 T-shirt order would have cost $132 to bring into the US from any of these countries.
Now, as some countries face similar tariff rates as China, Herman says, people are questioning whether leaving or dialing back production was the right move. “What happened last year wasn’t just about China, it was about all countries,” says Angela Lewis, global head of customs at Flexport. No move, it seems, was a “right” move. Where does that leave fashion’s production map?
Where fashion is being made
Naturally, fashion companies are moving manufacturing as they look to minimize blows to the bottom line. 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 where Lewis sits, she’s seen more Chinese companies setting up operations in lower-cost Southeast Asian countries, like Cambodia and Vietnam — meaning it’s not just other countries looking to diversify from China, but Chinese manufacturers themselves.
In the last year alone, China’s share of US apparel imports by volume has dropped from 36% to just 28% of total US apparel imports. Cambodia’s, by contrast, climbed more than 35%, and Pakistan saw a 20% uptick, marking the biggest growth among America’s top 10 clothing producers. Vietnam, the second-largest supplier of apparel to the US, now accounts for nearly 19% of total US apparel imports, closing a gap with China that would have seemed unbridgeable before.
“If you look at dollar value, US apparel imports from Vietnam are actually larger than they are from China for the first time ever,” says Herman. “That’s never come anywhere close before.” In the last year, Vietnam surpassed China as the largest apparel supplier to the US in terms of import value, accounting for 21% of what the US spent on clothing imports, compared to China’s 14%. In 2024, China held 21% of US apparel import value, while Vietnam accounted for 19%.
Trending as 2016 is, it was a time China might likely be nostalgic for, too. Back then, the country accounted for 41% of US apparel imports, and the next closest supplier — Vietnam — accounted for just 12%.
Bangladesh remains the third-largest supplier of clothing to the US, and its exports increased by nearly 16% in the last year. The clothing it sends to the EU, however, accounts for half of what it manufactures for export, according to the Bangladesh Apparel Manufacturers Association (BGMEA), and that number could continue to increase given its duty-free access to the EU under its Everything But Arms (EBA) scheme. The country’s election on February 12 could mean ramped-up apparel production, too, as the new administration’s election manifesto outlined plans to strengthen and diversify Bangladesh’s industrial sector. With apparel accounting for more than 80 percent of its total exports, says Mostafiz Uddin, who owns the Denim Expert Ltd. factory there, “We expect to see the industry witness sustained growth in the coming years.”
Egypt, Jordan, and Pakistan have also been “really big winners” when it comes to US apparel sourcing, Herman says. Both Egypt and Jordan benefit from a Qualified Industrial Zones (QIZ) program that allows for garments and textiles to enter the US duty free provided they use a certain level of inputs from Israel. “A lot of companies, all of a sudden, are returning to those countries, particularly for garments, not for shoes or accessories,” Herman says.
The US imported 12% more clothing from Egypt in the last year, though its share still accounts for less than 2% of total US apparel imports. The potential for growth there, however, is significant, says Eugene Havemann, founder and CEO of Atlas Apparel, a new knit manufacturing company establishing a vertical sourcing solution in Egypt to capitalize on the moment.
“There are so many opportunities,” he says. “And if you understand the US market and its needs, you can structure your offering in a way that it can solve a lot of those challenges that people have because they can no longer buy the smaller quantities out of China, they can no longer get the shorter lead times, the things that previously only China could do. Well, Egypt is now evolving to where it’s going to be able to give you those solutions.” Havemann likens this period in Egypt to the mid-’80s in Bangladesh when the country’s factory count ballooned thanks to the right mix of free trade agreements, low-cost labor, and a ready workforce. Maybe even more importantly, in a climate where politics plays a big part in how tariffs get pushed around, relations between the US and Egypt are “on the friendlier side”, according to Havemann, who doesn’t expect the QIZ agreement to be tampered with or eliminated.
It’s hard to predict much these days, and factories have had to be more nimble than ever. For MAS Holdings, one of South Asia’s major apparel manufacturers with operations in 14 countries, figuring out where to develop has been a “constant” challenge, says Brad Ballentine, CEO of MAS Acme USA, the strategic arm of the parent company. When India got hit with a 25% tariff on US-bound apparel last year, the company pivoted. “We had to start focusing more on [shipping to] our European partners because the EU trade deal was really, really favorable,” he says. India was previously able to export clothing to the EU, paying duties between 9% and 12%, but the agreement the two sides reached in January is expected to eliminate those tariffs entirely. The US signed its own trade deal with India this month, which could see imports from the country climb more than the 7% it grew in the last year.
A US-Taiwan trade deal was also signed recently, and the African Growth and Opportunity Act (AGOA) and the Haiti HOPE/HELP trade preference programs were just extended for one year, so the sourcing map will continue to shapeshift in the coming year. The EU paused its trade deal in light of Trump’s new 15% tariff, so what happens there could introduce further uncertainty.
Is nearshoring the answer?
Nearshoring has become an even more critical conversation for fashion in recent years, as tariffs have made geography both a risk and a cost factor. Where companies make clothes now directly affects margins, speed, and, frankly, survival. The idea with nearshoring, or making closer to a home country, was that companies could benefit from saving on shipping costs, minimizing political and trade volatility that can tie goods up in various ways, and tapping into trade agreements that have largely been more beneficial between neighboring nations.
But unlike the growth in Asia and Southeast Asia, Central America has taken a “huge hit”, says Herman. The Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) was supposed to allow for free trade with the US as duties phased out between 2006 and 2009 when the deal entered into force with participating countries, but those same countries were slapped with the 10% reciprocal tariff last year. For now, under the new 10% global rate, their tariffs remain the same. Honduras saw its exports to the US decline most significantly, by more than 17%. The US reached trade agreements with El Salvador and Guatemala at the end of January that will see the 10% tariff lifted, though it’s not yet clear how soon that will happen or whether things will ramp up in any big way for fashion manufacturing there.
Of course, a lot of fashion’s movement depends on what’s being made. Despite what the current sourcing map says, the top five trading partners to the US for men’s cotton T-shirts today are Nicaragua, Honduras, Jordan, Haiti and China, according to Flexport’s Tariff Simulator, which also shows top trade partners and trade lanes for a particular product.
Women’s jeans are primarily coming from Vietnam, China, Bangladesh, Pakistan and Cambodia. For men’s wool sweaters, the map shifts in favor of China, Italy, Macao, Vietnam and Cambodia. Women’s leather shoes are coming into the US from Italy, Spain, Brazil, Vietnam and China.
Nearshoring has helped some companies when it comes to making in Mexico, which saw its apparel exports to the US climb more than 9% in the last year. “I see the market in Latin America continuing to grow, especially for apparel in Mexico,” Lewis says. “I don’t think US manufacturing is coming back.”
Trump’s unpredictable tariffs have been, in part, a bid to boost manufacturing in the US, but it’s just not something anyone anticipates materializing with any significance.
There hasn’t been a lot of manufacturing investment happening in the US, says Ballentine, because the factories aren’t there, the labor isn’t there, and the machinery to make the clothes still largely comes out of China and is much more costly given the tariffs. A $300,000 piece of equipment could cost an extra $30,000 with tariffs, so even companies trying to ramp up US manufacturing have put their expansion plans on hold.
Only 3% of US apparel is made domestically, according to Herman, who says, “Even if that doubled, you’re still talking about 6% of the industry. There is interest, but you’re not talking about half the industry moving back here or anywhere close to that. Getting to even that 6%, by Herman’s estimates, would take at least 10 to 15 years.
How tariffs have impacted big brands
Vogue Business: How have recent tariff changes influenced where and how you source your products?
Peter Charles: If you go back in history, we were one of the first companies to actually de-risk from China before it was even a thing. We started down a path of multi-country diversification back in the early 2000s, and that has accelerated over the last decade. It accelerated a lot during Covid. The strategy we put in place prior to Covid helped us navigate that obviously massive amount of disruption, so when Liberation Day came in April, it was about continuing to ensure single points of failure were not something we had to worry about.
The major strategy of our business for several years has been quality and the security of supply — those 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 as a result of tariff pressures?
The largest country that we operate in accounts for around about 30% of our total penetration. In an ideal position, we’d like to be closer to 25%. We’re manufacturing primarily in Southeast Asia, like many people in our industry, 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 already come from China, so it’s a very small part of our business. In raw materials, we still have a significant presence in our Tier-2 supply base, though we’re constantly looking to reduce risk amid geopolitical challenges. But China remains an important market and a high-quality manufacturing hub for the componentry we need for our products. If I look at general drift, I think Vietnam and Cambodia will be countries over time — because of population size and cost structure — that will probably drift down for us a little bit over a five-year horizon.
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 pretty rich history in apparel and footwear manufacturing as well, so there’s good DNA there in terms of manufacturing the kinds of products and the skills we would need. So we are strategically investing in that.
Vogue Business: Have tariffs changed the way you think about long-term supplier relationships versus short-term agility?
Tariffs did not change the nature of our relationships with individual suppliers. When you see situations as we had recently in India, we diverted some of our Indian-made products to international markets rather than deselect that vendor. We had a very long-standing relationship within those countries, so we just pivoted around. And that goes back to some of the structural advantages we have, [including] more flexibility on the commercial side of how we move inventory around between the country of origin, or the country of destination. Those situations have allowed us to ride out these frankly temporary situations, because the rules continue to change.
Vogue Business: What’s the biggest myth about how tariffs affect fashion sourcing?
That it’s only about cost. Everybody’s been so focused on the cost implications of this for companies, for importers, for brands, for retailers, and then, ultimately, for consumers. Because some of this, obviously, is ultimately passed on to the consumer, and there’s been a lot of conversation around the mitigation of cost around that. I think for the many companies that are running professional supply chains today, the diversification part of it continues to be equally as important as how you solve the short-term cost problem. And for us, we haven’t really let the short-term cost-mitigation issue 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 has sourcing operations in countries including China, India, Italy, and the US. Its ability to navigate today’s challenges, says Ralph Lauren chief product and merchandising officer Halide Alagöz, “reflects years of deliberate work to build a supply chain that is diversified and flexible”.
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 changed the business significantly.
The label was producing its line between New York and the Dominican Republic, with most fabric still coming from Asia. When the tariffs hit, it meant more sourcing from the Dominican Republic and opting for different fabrics from a vertical supplier there, since the added costs were prohibitive to get them from Asia. For about a month at the start of the year, even e-commerce sales were paused while designer Aaron Potts plotted “a workaround”, he says.
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“I had sweaters coming out of China, and one day the tariffs were one thing, and the next day it was something else,” designer Aaron Potts says. “Sometimes the tariff was so expensive it affected our deliveries.” But a small fashion business in this current market can’t stomach 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 both in the industry and on a more macro level, A.Potts is introducing more accessibly priced items, like tees and sweatshirts printed with his sketches, to live alongside the main collection. The tariffs, Potts says, introduced new things 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 of a firestorm than 2025 when it comes to new tariffs, costs are expected to go up at retail. Brands that have tried everything to avoid passing costs onto consumers — from shipping orders ahead of tariff deadlines, to cutting into stockpiled fabric, to requesting discounts from suppliers or finding greater efficiency in their supply chains — are now out of alternative options. The pressure is mounting everywhere, according to Uddin, who says some brands are absorbing the tariffs while others are pushing manufacturers like him to bear the full cost.
Companies across fashion’s supply chain simply “can’t hold the line anymore”, Herman says.
“The costs are just going to be there,” he says. “They can no longer be borne by the importer. Those costs are going to have to be shared with the consumer and others going forward because there is nowhere to go to avoid those costs.”
As long as uncertainty rules fashion, where companies source clothes will continue to shift, as will the merchandising mix, as they navigate what’s really worth making. It’s a reality Flexport’s Lewis believes will mean consumers see fewer SKUs in stores because companies will need to be more strategic about which products they source.
Fashion, in Herman’s words, is “undergoing a generational change”, and there’s no telling what the map will look like when the industry emerges from this era.
“The beauty of our industry is that there’s always been a low barrier to entry. Anybody could start even producing things in their garage, sell it to a local boutique, and go from there,” Herman says. “But with the complexity of the trade and sourcing environment right now, it s going to deter innovation in the industry and the new entrants that have made fashion so vibrant for so long.”
