US textile and apparel imports rebounded 2.8% year-on-year in May 2026 to $8.46 billion, following four consecutive months of decline. However, cumulative imports for January-May still contracted 8.92% to $39.13 billion. These figures reveal not merely weak demand but a deep reallocation of orders within the global textile supply chain.
Structural Divergence Behind the Data
In Q1, US imports fell 11.6% to $21.4 billion, a sharper drop than expected. Yet the May uptick suggests consumer demand has not collapsed; destocking by brands was the primary drag. More striking is the supply-side divergence: China and India together lost about $4.5 billion in import share, exceeding the overall market decline. Meanwhile, ASEAN's share rose to 20.83%, making it the biggest winner in this adjustment.
This shift reflects cost-driven and policy-hedging strategies. Persistent US-China trade tensions and relatively high tariffs on some Indian products have pushed US buyers to accelerate order transfers to Southeast Asia. For Chinese textile exporters, direct apparel orders to the US are shrinking, but opportunities remain for upstream fabric, yarn, and accessories—Vietnamese and Cambodian garment factories still rely heavily on Chinese inputs.
Tariff Rules: A Turning Point for ASEAN's Dividend
The new US tariff rules effective July 24 target major sourcing countries including Vietnam, Cambodia, Indonesia, Bangladesh, Pakistan, and India. This directly threatens the order growth these countries accumulated through cost and locational advantages. Different tariff tiers widen cost gaps among competitors, prompting brands to reassess sourcing decisions more cautiously.
Given the industry's thin margins, higher tariff costs compress factory bargaining power. Brands may reconsider near-shoring options such as Mexico or Turkey, or even reshore to the US. A new round of order reallocation is inevitable, and Southeast and South Asian producers can no longer count on stable procurement advantages.
Transmission Effects on China's Supply Chain
The new tariffs are not entirely negative for China. On one hand, higher costs in ASEAN may reduce demand for Chinese fabrics and yarns—as final garment prices become less competitive, order volumes shrink. On the other hand, some orders from high-tariff countries may return to China, especially for categories requiring quick turnaround and high quality. This dual pull requires suppliers to closely monitor tariff details across countries and adjust export strategies flexibly.
Whether May's rebound extends depends on US consumer sentiment and brand inventory digestion. The biggest variable remains the implementation details of tariff rules and any countermeasures (e.g., currency adjustments, subsidies).