The US textile and apparel import market is undergoing a quiet share shift. In the first five months of 2026, total imports fell 8.92% year-on-year to $39.13 billion, but May saw a 2.8% rebound to $8.46 billion. This decline-then-rise pattern reveals a deeper supply chain restructuring—the combined $4.5 billion loss by China and India is not simply shrinkage but is being precisely absorbed by ASEAN countries.
The Logic Behind the Data
The first quarter saw imports drop 11.6% to $21.4 billion, with four consecutive monthly declines fueling pessimism. However, May's rebound suggests this contraction was more a concentrated inventory correction by brands than a collapse in end demand. For buyers, this means underlying US consumer demand remains intact, and order fluctuations are driven more by inventory cycles than structural decline.
From the supply side, ASEAN's import share has climbed to 20.83%, making it the biggest winner in this adjustment. But behind this figure lies a zero-sum game: the order losses from China and India exceed the overall net decline in the US market. In other words, ASEAN's growth comes almost entirely from China and India's concession, not from a larger pie. For domestic textile and apparel exporters, this means direct competition in the US apparel market will remain intense, but upstream intermediate goods like fabrics and yarns may gain new export channels due to the expansion of Southeast Asian apparel capacity.
Tariff Policy and Origin Reassessment
The new US tariff rules effective July 24 have paused this shift. Major sourcing countries including Vietnam, Cambodia, Indonesia, Bangladesh, Pakistan, and India are placed in different tariff tiers, widening cost gaps. For an industry with thin margins, higher tariff costs will directly alter brand sourcing decisions—they will no longer focus solely on labor costs but will comprehensively evaluate compliance costs, supply chain stability, and tariff risks.
This means Southeast Asian countries that have enjoyed cost advantages in recent years will face their first real policy test. Order growth built on location advantages may fluctuate after tariffs take effect. For domestic companies, this is an observation window: which origins can remain competitive under tariff pressure, and which will see orders flow out again, will determine supply chain layouts for years to come.
Window for Intermediate Goods Exports
A often-overlooked fact is that garment factories relocated to Southeast Asia still heavily rely on external fabric and accessory supplies. The completeness and responsiveness of China's textile supply chain are hard to replace in the short term. Therefore, despite pressure on apparel exports, exports of intermediate goods like fabrics and yarns may actually benefit from Southeast Asian capacity expansion. Domestic foreign trade companies need to adjust their mindset from "selling garments" to "selling materials," proactively connecting with overseas factories' procurement needs.
Practical Recommendations
For Buyers - Reassess total landed costs across origins, including tariffs, logistics, and lead times, not just unit prices. - Monitor the sustainability of May's rebound; if US consumption remains strong, consider early stocking to lock in low prices. - For countries like Vietnam and Cambodia with new tariffs, diversify orders to lower-tariff or exempt categories.
For Foreign Trade Companies - Deepen exports of fabrics, yarns, and other intermediate goods to capture the supporting demand from Southeast Asian apparel capacity growth. - Study US tariff details and adjust product mix and target markets based on different tariff tiers. - Strengthen cooperation with local Southeast Asian factories through technology licensing or joint ventures to embed into regional supply chains.
The global textile supply chain will not stay fixed in one region. The interplay of compliance, cost, and supporting capabilities will determine future order flows. For Chinese companies, rather than dwelling on lost apparel orders, it is wiser to actively participate in this restructuring and find new growth points in intermediate goods.