US textile and apparel imports underwent a dramatic share reshuffle in early 2026, but the real test may only be beginning. Customs data shows that from January to May, total imports fell 8.92% year-on-year to $39.13 billion, with the first quarter dropping 11.6% and May rebounding 2.8% to $8.46 billion, ending four consecutive months of decline. This is not simply weak demand but a combination of brand destocking and sourcing restructuring.
Background
Notably, China and India together lost $4.5 billion in orders, exceeding the overall net decline of the US market, indicating that other suppliers are quickly filling the gap. ASEAN's share rose to 20.83%, becoming the biggest beneficiary, with Vietnam, Cambodia, and Indonesia absorbing a large number of diverted orders. However, this dividend window is now shadowed by policy risks—the new US tariff rules effective July 24 will directly impact major sourcing countries including Vietnam, Cambodia, Indonesia, Bangladesh, Pakistan, and India.
Different countries fall into different tariff tiers, widening cost gaps among competitors. For textile manufacturers with already thin margins, higher tariffs will directly affect brands' sourcing decisions, prompting them to reassess the overall cost-effectiveness of each origin. This means that suppliers that once relied purely on low costs and location advantages must now find a new balance between compliance, production efficiency, and supply chain support.
Industry Impact
For Chinese textile trading companies, this brings dual implications. On one hand, direct apparel exports to the US face sustained competitive pressure, and the order outflow is unlikely to reverse in the short term. On the other hand, garment factories moving to Southeast Asia still heavily rely on external fabric, accessories, and yarn supplies, preserving a valuable export channel for China's upstream industry. In fact, many factories relocated to Vietnam or Cambodia still source most of their fabrics from China, and the resilience of intermediate goods trade may be stronger than that of finished goods.
The sustainability of May's rebound depends on US consumer sentiment and brand inventory digestion. The implementation of July's tariff rules will be the biggest variable in the coming months. Competition among origins will intensify, and the global textile supply chain will not settle in one region. Compliance costs, supply chain support, and response speed will jointly determine the future direction of each exporting economy.