The landscape of US textile and apparel imports is undergoing a quiet but profound reshuffle. According to public industry data, US imports of textiles and apparel fell 8.92% year-on-year to $39.13 billion in the first five months of 2026. But behind these numbers lies a more telling structural shift: the overall decline was almost entirely borne by China and India, while ASEAN gained share. This substitution effect is more significant than the total volume change.
Data Disparity
Breaking down monthly figures, imports did not decline uniformly. In Q1, US imports fell 11.6% to $21.4 billion, but May saw a 2.8% year-on-year increase to $8.46 billion, halting the slide. This suggests the earlier drop was more about inventory destocking by brands than a collapse in consumer demand. As inventories normalize, order replenishment will likely emerge.
However, replenished orders may not return to old origins. China and India together lost about $4.5 billion in import share, exceeding the net decline of the entire US market. Most of those lost orders appear to have shifted to ASEAN, whose share rose to 20.83%. For Southeast Asian factories, this was a boon, but policy risks are now rapidly approaching.
Tariff Shockwave
On July 24, new US tariffs took effect targeting major sourcing countries including Vietnam, Cambodia, Indonesia, Bangladesh, Pakistan, and India. Different countries fall into different tariff brackets, and those that previously relied on cost and location advantages now face higher cost pressures. The textile industry has thin margins; every percentage point increase in tariffs can alter brand sourcing decisions.
More critically, tariff disparities widen cost gaps among competitors. Even if production costs are similar in Vietnam and Indonesia, differing tariffs will lead to different landed costs. Brands will likely reassess the cost-effectiveness of each origin, and order reallocation may unfold over the coming quarters. For Southeast Asian factories, whether they can sustain previous growth depends on their ability to absorb tariff costs through efficiency gains or supply chain optimization.
Window for Intermediate Goods
For Chinese foreign trade practitioners, these signals require a two-sided view. On one hand, direct exports of garments to the US face persistent competitive pressure, especially for low- to mid-end products squeezed by ASEAN and South Asia. On the other hand, while garment orders shift, there remain opportunities for intermediate goods such as fabrics and yarns. Many garment factories relocating to Vietnam or Cambodia still rely on external fabric and accessory supplies, preserving a niche for the Chinese industry.
In other words, garment orders may leave, but fabric orders may stay. If domestic companies maintain quality and delivery advantages in intermediate goods, they can capture a share of this shift. This requires closely following overseas clients' needs and even proactively setting up warehousing or processing facilities in Southeast Asia to shorten response times.
Outlook and Strategy
Whether May's rebound becomes a sustained recovery will depend on US consumer sentiment and brand inventory progress. But the tariff rule effective July 24 will be the biggest variable in the near term. Southeast Asian and South Asian origins no longer enjoy stable procurement dividends, and competition among origins will intensify. The global textile supply chain will not simply anchor to one region; compliance capability, cost control, and industrial chain support will jointly determine the future of each exporting economy.