This Week’s Takeaway
China and India are losing U.S. apparel volume, while Cambodia and Indonesia are gaining ground. For sourcing teams, the shift raises a practical question:
Are there better alternatives for the products you currently buy?
But country-level growth doesn’t guarantee the right suppliers, costs, or capacity. The opportunity is to identify where alternatives merit a closer look before making sourcing decisions.
This Week’s Developments
1. China’s U.S. Apparel Import Volume Falls 21.61% as Cambodia and Indonesia Grow
From January through August 2026, U.S. apparel import volume fell 21.61% year over year from China and 24.91% from India, according to The Business Standard, citing data from the U.S. Department of Commerce’s Office of Textiles and Apparel (OTEXA).
Other major suppliers moved in different directions:
Cambodia: +7.18%
Indonesia: +8.53%
Bangladesh: −2.75%
Vietnam: −0.18%
Pakistan: −0.27%
Overall, U.S. apparel import value fell 7.42% to $49.08 billion. Import value from China dropped 29.39%, while Bangladesh fell 4.43%. Cambodia rose 6.91% and Indonesia 2.58%.
The figures show import trends by country of origin, but don’t establish whether orders leaving China went to another country.
The Importance
China’s decline is substantial, but the sourcing picture is not a simple one-for-one replacement.
Cambodia and Indonesia are gaining U.S. apparel volume even as the overall market contracts. That makes them worth investigating as potential sourcing alternatives, but country-level growth alone doesn’t establish whether their suppliers can meet your product’s cost, quality, capacity, and lead-time requirements.
Compare trends in your specific product categories and assess individual suppliers before shifting orders.
Source: The Business Standard · OTEXA
2. The U.S. Is Expanding Its Trade Focus on Manufacturing Overcapacity
On October 7, the Office of the U.S. Trade Representative (USTR) announced that 14 economies had joined the United States in a statement addressing excess manufacturing capacity.
Participants include India, Japan, South Korea, Canada, Mexico, Türkiye, the United Kingdom, and the European Union. They agreed to begin work on excess capacity in key manufacturing sectors and related trade practices.
The Importance
The initiative signals greater U.S. attention to manufacturing capacity and trade practices across major economies. It does not impose new apparel tariffs or restrictions by itself.
If you’re considering shifting production to a country gaining U.S. market share, watch for follow-up measures that could affect its export costs or competitiveness.
Source: USTR
3. USTR Opens Consultations Ahead of the 2027 USMCA Review
On October 2, USTR opened public consultations ahead of the 2027 joint review of the United States–Mexico–Canada Agreement (USMCA).
Comments and requests to participate in the public hearing are due January 12, 2027.
The review does not change current rules. Apparel eligibility under USMCA can depend on product-specific rules of origin, including requirements for yarn, fabric, and garment production.
The Importance
Changes resulting from the review could affect the cost advantages of sourcing qualifying apparel from Mexico or Canada. Companies relying on USMCA preferences should monitor proposals that could affect their products or regional supply chains.
For now, existing rules remain in effect.
4. U.S., Mexico, and Argentina Agree to Cooperate on Forced Labor in Global Supply Chains
On October 2, USTR announced that trade ministers from the United States, Mexico, and Argentina had agreed to issue a statement on eliminating forced labor in global supply chains during the G20 Trade Ministerial.
The statement reinforces cooperation on forced labor as a trade issue. It does not introduce a new U.S. apparel import ban or importer documentation requirement by itself.
The Importance
Knowing your direct supplier doesn’t necessarily reveal every factory or subcontractor involved in producing a garment. Supply-chain visibility remains important for identifying potential problems and responding to existing legal requirements.
If your products pass through multiple factories or intermediaries, review where information gaps exist. The announcement is a policy signal, not evidence that a particular supplier violates the law.
Source: USTR
5. New AGOA and Haiti HELP Quota Periods Begin
The new annual quota periods for qualifying apparel under the African Growth and Opportunity Act (AGOA) and Haiti’s Haiti Economic Lift Program (HELP) began October 1, 2026, and run through September 30, 2027.
U.S. Customs and Border Protection (CBP) has outlined the applicable quota procedures. If an AGOA quota group exceeds its limit at the specified opening time, accepted entries are prorated.
Legislation enacted September 2 extended AGOA and Haiti’s HELP program through December 31, 2028. Haiti’s separate HOPE and HOPE II programs were not similarly extended under those provisions.
The Importance
Trade preferences can reduce apparel import costs, but eligibility depends on the specific program, product, and applicable rules. Annual quota periods are also separate from the dates that authorize a program to operate.
If you source from eligible African countries or Haiti, confirm which program applies, whether your products qualify, and whether quota limits affect your shipments. For Haiti, don’t assume HELP’s extension also applies to HOPE and HOPE II.
Sources: CBP · CBP · Public Law 119-103 · U.S. Department of Commerce
What This Means for Sourcing
Reassess sourcing options. Cambodia and Indonesia are gaining U.S. apparel volume while China and India are declining. Investigate product-specific alternatives rather than assuming one country can replace another.
Watch for changes that affect costs or compliance. The USMCA review, manufacturing-overcapacity initiative, and forced-labor discussions warrant monitoring, but their effects depend on any subsequent measures.
Verify trade preferences before relying on them. AGOA and Haiti HELP have entered new quota periods, and program eligibility, quota limits, and authorization dates must be checked separately.
The goal is to spot changes early enough to evaluate your options before they affect sourcing costs or supply-chain decisions.
© The Trade Thread