US tariffs fail to push fashion brands toward domestic sourcing, USFIA study finds
A 2025 benchmarking study from the U.S. Fashion Industry Association found no clear evidence that tariffs are moving apparel production back to the United States. About 40% of surveyed brands sourced from the U.S., unchanged from 2024, while more than 80% plan to diversify to other countries.
No evidence tariffs are driving reshoring
U.S. tariff policy has produced "no clear evidence" that fashion companies are moving production home, according to the 2025 Fashion Industry Benchmarking Study published in July by the U.S. Fashion Industry Association (USFIA). The report surveyed 25 fashion companies between April and June, all of which said they expect higher tariff and trade barrier costs this year.
About 40% of respondents said they sourced goods from the United States — the same share reported in the 2024 study. Around 70% said they had delayed or canceled sourcing orders because of tariff increases under the Trump administration.
Diversification, not domestic production
The most common response to tariffs has been to spread production across more countries. More than 80% of respondents said they would diversify their production footprint to other countries and regions. About 44% said they would expand sourcing from the Western Hemisphere, while 17% planned to source more "Made in the USA" apparel and textiles.
Asia remains the dominant sourcing base, USFIA reported. While brands aim to cut China sourcing to low single-digit percentages, Vietnam, Bangladesh, Cambodia and Indonesia have become more attractive alternatives.
Why "Made in the USA" struggles
Sheng Lu, a professor at the University of Delaware and the report's author, told Supply Chain Dive that tariffs directly disadvantage U.S.-based production. "A U.S. company may manufacture the clothes here, but use yarns, fabrics, and zippers from other countries," Lu said. When tariffs raise the cost of those materials, apparel made in the U.S. loses price competitiveness.
The data underscores the problem. Between January and July, U.S. production of textiles such as fibers, yarns and fabrics fell 6.2%, while apparel production dropped 4.3%, according to Lu. Domestic producers account for less than 10% of a typical company's sourcing footprint. U.S. yarn and fabric exports to Western Hemisphere partners, including Mexico and members of the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR), fell between 8% and 10% in the first five months of the year, slowing garment exports from those countries that rely on U.S.-origin textiles.
Infrastructure and labor barriers
Beth Hughes, vice president of trade and customs policy at the American Apparel and Footwear Association, said suppliers decide whether to relocate, and factory owners will not build new facilities without contracts in place. Brands, in turn, hesitate to commit to long-term contracts amid trade policy uncertainty. Investors have built infrastructure in Asia far faster than in the Western Hemisphere, Hughes said, though some Asian suppliers are moving to Central America. Labor is another hurdle, requiring both technical skills and workers willing to do the jobs.
Both Lu and Hughes argued that punitive tariffs alone will not rebuild domestic capacity. Lu said U.S. trade policy needs long-term strategies that encourage innovation and investment at home, while many domestic factories remain in "wait and see" mode.