Source: Supply Chain Dive
Date: 8th October 2025

Trade policy uncertainty and high production costs continue to deter onshoring despite rising tariff pressures.

A new industry benchmarking report reveals that recent U.S. tariff policies have not prompted fashion companies to increase domestic production. The 2025 Fashion Industry Benchmarking Study, published by a leading trade association, found no clear evidence that higher tariffs have led to a shift in sourcing strategies back to the United States. Instead, brands are adapting by diversifying supply chains to other regions, with more than 80% of respondents planning to expand production across multiple countries to offset tariff-related risks. Only a small share indicated an interest in developing “Made in the USA” production due to ongoing challenges with costs, material sourcing, and infrastructure limitations.

The report highlights that Asia continues to dominate apparel sourcing for U.S. fashion brands, even as companies reduce their dependence on China. Alternative suppliers across Vietnam, Bangladesh, Cambodia, and Indonesia are becoming more attractive due to stronger production diversity, flexibility, and vertical integration. Meanwhile, U.S. textile output, including yarns, fibers, and fabrics, has declined by over 6% this year, with apparel production falling by more than 4%. This contraction underscores the lack of competitive advantage for domestic producers, as higher tariffs on imported raw materials also raise the cost of U.S.-made apparel.

Experts note that without significant investment, the U.S. industry remains ill-equipped to expand local manufacturing or scale sustainable production. Labor shortages, skill gaps, and outdated infrastructure add to the challenge. Many domestic factories remain cautious about expansion due to policy uncertainty and the absence of long-term commitments from brands. As a result, imports continue to dominate the fashion market, with most companies maintaining global supply chains that balance cost efficiency, flexibility, and risk management rather than shifting fully toward domestic sourcing.

For shippers, importers, and exporters, this continued reliance on overseas manufacturing reinforces existing trade routes and freight dependencies across Asia and the Western Hemisphere. Importers will continue to depend heavily on maritime transport to bring finished goods to U.S. ports, while exporters of raw materials, such as textiles and fibers, may face reduced demand as fewer U.S.-based factories expand production. Shippers will need to manage fluctuating container volumes and longer lead times as sourcing diversification spreads across multiple regions. Despite tariff pressures, the fashion industry’s global logistics footprint remains firmly international,  sustaining steady cargo flows through major U.S. gateways.