The U.S. administration’s decision to impose significant tariff increases on imported goods has raised alarms about the future of the global trading system, which has traditionally relied on multilateral, regional, and bilateral trade agreements. These sweeping tariff hikes are expected to pose a major challenge, especially for the textile and apparel industries.

Mr. K.V. Srinivasan, President of the International Textile Manufacturers Federation (ITMF), warned that the new tariffs would severely impact textile imports, particularly apparel, into the U.S. Currently, about 95% of apparel sold in the U.S. is imported, with key suppliers being China (30%), Vietnam (13%), India (8%), Bangladesh (6%), and Indonesia (5.5%). These countries, which previously faced tariffs of 11-12%, will now face rates ranging from 38% to 65%.

In response to these steep increases, U.S. apparel importers are exploring alternative sourcing options in countries with lower tariffs. However, many of these alternatives come with challenges, such as higher production costs, limited product ranges, or insufficient production capacities, making it difficult to fully replace the current supply chain model.

The option of reshoring apparel manufacturing to the U.S. also presents significant hurdles. Labor costs in the U.S. are substantially higher, and many of the essential textiles required for apparel production would still need to be imported, now at increased costs. Additionally, the U.S. faces a shortage of skilled workers in the apparel sector, further complicating the prospect of reshoring. Whether through higher tariffs on imports or costly domestic production, the result will likely be increased apparel prices, which will contribute to inflationary pressures.

Mr. Srinivasan added that the trade policy pursued by the U.S. administration is likely to disrupt global textile and apparel supply chains, creating uncertainty and driving up prices. He suggested that instead of imposing unilateral tariff hikes across all product categories, it would be far more beneficial for the global textile and apparel industry if governments engaged in negotiations and collaborative policymaking to address trade concerns more effectively.