Currently, US trade policies continue to impact Asian production, reshaping the global apparel sourcing landscape. The US Apparel & Footwear Association (USFIA), in collaboration with Professor Sheng Lu's team at the University of Delaware, completed its 2026 industry benchmark survey and officially released the report on July 20th. The survey, conducted from April to June, visited 30 leading US fashion companies to gather their perspectives on trade policies, production costs, and the global supply chain.
I. Continued High Pressure from Trade Policies, Multiple Tariffs Imminent
The survey shows that tariff barriers and policy uncertainty stemming from trade protectionism have been the primary concern for US apparel brands for the second consecutive year.
In June, the USTR completed its Section 301 investigation into "forced labor imports" from 46 economies, planning to impose an additional 12.5% tariff, with China on the control list. The conclusions of another round of Section 301 investigations into "structural overcapacity" in 16 countries are about to be announced. The Section 122 global 10% tariff, which replaced the temporary tariff, officially expired on July 24.
Long-term optimism in the industry has fallen to its lowest point in this survey, with only 62% of corporate executives optimistic about the industry's development over the next five years. However, a key turning point has emerged: by 2026, the willingness of overseas brands to withdraw from the Chinese supply chain on a large scale has cooled significantly. Companies are no longer blindly expanding into new overseas production locations, and generally choose to solidify existing cooperative channels and deepen ties with established suppliers. Industry expert Sheng Lu pointed out that the Chinese supply chain remains irreplaceable, and no brand plans to completely sever cooperation with China.
II. Anomalies in Import and Export Data: Surging Apparel Imports from China, Reshuffling the Production Landscape
The data reveals a significant contrast: In May 2026, US apparel imports from China surged by 18%, while the overall increase in US global apparel imports during the same period was only 2.8%, a particularly striking counter-trend growth.
The global sourcing geographical structure has undergone a clear adjustment: Utilization rates for sourcing from China, Vietnam, and Bangladesh have declined simultaneously, while Guatemala, Egypt, and Jordan have reached their highest sourcing shares in over a decade. Egypt and Jordan have entered the top ten US sourcing sources for the first time.
The utilization rate of Egypt's QIZ duty-free industrial zone increased from 38% to 53%, and the utilization rate of the US-Jordan Free Trade Agreement rose from 50% to 60%, leading all production areas in growth. These two regions are attractive due to their low labor costs and tariff preferences, with over one-third of US companies planning to expand their supply chains listing Egypt as a key region for consideration.
Corporate purchasing attitudes are shifting: 65% of companies maintain a diversified multi-country sourcing model, but the number of companies planning to expand into new countries and establish factories has decreased significantly. The industry focus has shifted from "geographical expansion" to "deepening relationships with existing suppliers and enhancing the resilience of the supply chain."
III. Reshaping the core advantages of China's supply chain and continuously strengthening its upstream bargaining power.
Although China's direct exports of finished apparel to the US are unlikely to return to historical peaks, multiple underlying advantages have revitalized the industry's attractiveness:
**Cost and order flexibility advantages are prominent:** Domestic labor costs have been declining continuously since 2025 under the deflationary environment, and current tariff levels on Chinese goods are roughly on par with Bangladesh. Relying on a complete vertical industrial chain, domestic factories can handle extremely small batches of 50-150 pieces for quick response orders. Compared to the 3,000-5,000 pieces minimum order threshold of large Vietnamese factories, the competitive advantage in small and urgent orders is solid.
**Continuously rising status of upstream raw materials:** Southeast Asian capacity expansion is highly dependent on Chinese fabrics and accessories; 60%-80% of Vietnam's textile raw materials are supplied by China. While China's share of imported finished products is declining, its influence in the global apparel upstream supply chain continues to rise. A smaller share does not equate to a decline in industry influence.
IV. Tariff Window Opens, Industry Undergoes New Reshuffling
With the expiration of the Section 122 temporary tariffs, the market initially anticipated a tax reduction benefit for approximately $30 billion worth of Chinese textiles and apparel. However, coupled with the impending implementation of the 12.5% Section 301 punitive tariff, export companies remain under pressure.
Simply relocating factories is no longer a sustainable strategy. Only companies that can balance tariff costs, compliance risk control, and production efficiency will survive the industry reshuffling.
Industry Summary
In today's market, supply chain resilience no longer equates to blind relocation. A rational, diversified layout to mitigate risks, and a focus on improving production efficiency and compliance management are the long-term development paths. China's apparel supply chain will not replicate past models, but it will not withdraw from the global market either. In the complex and ever-changing international trade environment, the core competitiveness of enterprises remains delivery speed, production costs, and product manufacturing capabilities. The future direction of the industry depends on the production schedules and core strengths of each factory.
