In the first five months of 2026, US textile and apparel imports fell 8.92% year-on-year, yet May alone saw a 2.8% rebound. This seeming contradiction reveals a market not collapsing but redrawing its sourcing map. China and India together lost $4.5 billion in share, while ASEAN's share rose to 20.83%. More critically, the tariff rules effective July 24 are pushing this shift into a new phase.
Background
According to TexPro's HS-code monthly data, US imports dropped 11.6% in Q1 to $21.4 billion, but after four consecutive monthly declines, May imports recovered to $8.46 billion, up 2.8% year-on-year. Industry consensus attributes the downturn to brand destocking rather than weak end demand.
The inventory cycle nearing its end, coupled with front-loading ahead of tariffs, explains May's rebound. However, absolute values remain below last year, indicating a fragile recovery. For export-dependent countries, this is both a breather and the calm before the storm.
Industry Impact
The loss of share for China and India is not a simple order transfer but a structural shift in US procurement strategy. ASEAN, leveraging cost and location advantages, absorbed many relocated orders, becoming the biggest winner. Yet this window is narrowing under new tariffs.
The July 24 tariff rules target Vietnam, Cambodia, Indonesia, Bangladesh, Pakistan, India, and others, placing them in different tariff tiers, widening cost gaps among competitors. Textiles operate on thin margins; every percentage point of tariff can alter brand sourcing decisions, triggering a new round of order reallocation.
For Chinese exporters, the signals are twofold. Direct garment exports to the US face mounting pressure, but the offshoring of orders does not take the entire supply chain—many relocated factories still rely on external fabrics and accessories, preserving a stable channel for Chinese intermediate goods.
Indeed, China's advantages in chemical fibers and high-end fabrics are hard to replace in the short term. Southeast Asian textile industries are expanding but remain weak in supporting industries—an opportunity for Chinese firms. Future export growth to the US may come more from yarns, greige fabrics, and accessories than finished garments.
Practical Recommendations
For Sourcing Buyers - Reassess total landed costs across origins, including tariffs, lead times, and quality, rather than comparing prices alone. - Scrutinize suppliers' compliance capabilities; under new tariffs, compliance risks can translate into hidden costs. - Consider a "China+ASEAN" dual-sourcing strategy, importing intermediates from China and assembling garments in Southeast Asia to balance cost and flexibility.
For Trading Companies - Expand fabric and accessory exports to Southeast Asia, leveraging the regional supply chain gaps to build stable client relationships. - Upgrade product mix toward higher value-added, differentiated items to reduce reliance on low-end garments and improve pricing power amid tariff shocks. - Monitor tariff details and adjust quotations and shipping schedules promptly; negotiate cost-sharing with overseas clients when necessary.
Whether May's rebound continues depends on US consumption and brand inventory digestion. But the tariff rules are certain, accelerating the reshuffle of the global textile supply chain. Compliance, cost control, and supply chain integration will determine future market positions. For Chinese companies, rather than lamenting lost garment orders, embracing the new channel of intermediate goods exports is the wiser path.