U.S. apparel imports in May 2026 rose 6.5% year-on-year in volume and 2.8% in value, signaling modest demand recovery. However, compared to two years ago, total import volume is still down 7.4% and total value down 4.8%, indicating that overseas supply has not fully rebounded. More notably, the average import unit price fell 3.5%, reflecting a growing preference for low-cost sourcing amid terminal market平价化 trends.
China's Exports to the U.S.: Illusory Growth and Real Pain
In May 2026, China's apparel exports to the U.S. surged 28.5% in volume and 18.4% in value, but this spike is almost entirely due to the sharp decline in the same month of 2025. Using two years ago as a baseline, China's export volume actually plunged 33.7%, and value dropped a staggering 43.7%. Stripping out the base effect reveals a grim reality: average unit price in May fell 8% year-on-year, and the cumulative average price for January-May dropped 18.6%. Combined with a nearly 30% volume decline in the first four months, Chinese manufacturers face both order shrinkage and margin compression in the U.S. market.
This is no short-term fluctuation. U.S. buyers have systematically reduced their reliance on China, and order diversion has become a long-term strategic move. While China remains the world's largest apparel exporter, its share in the critical U.S. market is eroding at an accelerating pace.
Vietnam: The Biggest Winner of Supply Chain Shift
In stark contrast, Vietnam's apparel exports to the U.S. have maintained synchronized growth in volume and value. In May 2026 compared to the same month in 2024, U.S. imports from Vietnam rose 19.1% in volume and 19.4% in value, completely free of base-effect distortion. Crucially, during the first four months of 2026—when China's exports to the U.S. contracted sharply—Vietnam still posted over 3% growth, demonstrating the persistence of order diversion.
Vietnam's competitiveness stems not only from lower labor costs but also from stable production capacity and favorable trade policies. A significant portion of orders that once flowed to China, especially in mid-to-low-end categories, has permanently shifted to Vietnam, Bangladesh, and other countries. This structural change means that even if U.S. end demand fully recovers, China is unlikely to regain lost ground.
Industry Impact: Low-Cost Trend Meets Supply Chain Restructuring
The decline in U.S. import prices and the rising share of low-cost sources from Vietnam are mutually reinforcing. Under inflationary pressure, buyers prioritize value for money, and Southeast Asian capacity fits the bill. For Chinese companies, this creates a double squeeze: order volumes are diverted, and even retained orders yield thinner margins.
A deeper implication is that the restructuring is now spreading from garments to upstream sectors like fabric and yarn. While Vietnam rapidly scales up garment production, it still relies heavily on China for fabric. This offers Chinese textile firms a buffer—by exporting high-value-added fabrics to Southeast Asia, they can partially offset lost garment orders. But this window won't last forever; Vietnam is already accelerating its own fabric production capacity.