Tariffs and Textiles: A Pivot in Fabric Sourcing
How tariffs influence and affect how we develop fabric
2025 will be remembered as a turning point for the global apparel supply chain — not because of a pandemic or a natural disaster, but because of tariffs.
Over the past few months, a sweeping wave of trade enforcement measures has hit the fashion industry harder than expected. I’ve already discussed the end of De Minimis, yet new tariffs have left sourcing and development teams scrambling. For some brands, the changes feel like déjà vu or post-traumatic stress from the chaos of COVID-era supply chain disruptions. Unlike during the pandemic, where logistics delays were external and unpredictable, the current shifts are deliberate and political. They're being written into law with long-term consequences, with every hour, every day and every week brining in a new challenge. Tariffs that once felt like distant financial levers are now redefining what gets sourced, where production goes, and which suppliers still make the cut.
For product teams, the urgency is real. Fiber choice, mill relationships, and even color palette decisions are now being shaped by tariff exposure. The days of cost-engineering a fabric in isolation from global policy are over...
In this piece, I’ll analyze and speculate how brands in general might be pivoting their strategies in real time. We'll examine which regions stand to gain, what risks brands should weigh, and how smaller players can stay agile in a landscape shaped by trade policy.
Because when tariffs rewrite the rules, it's the fabric of the industry (quite literally) that gets reshaped.
The Tariff Landscape in 2025: What's Changed and Why It Matters
The textile and apparel industry has always lived with tariffs but in 2025, the volume and complexity of those tariffs have reached an inflection point.
Historically, tariffs on apparel, especially from China, were already steep. Under Section 301, many items have carried rates as high as 25–30% since 2018. But brands largely absorbed those costs or worked around them through small parcel shipping, offshore intermediaries, or by focusing duties on finished goods while keeping raw material sourcing centralized.
Now, that patchwork is unraveling.
In the first half of 2025, the U.S. government expanded its enforcement of origin claims, cracked down on transshipped goods, and closed loopholes like the de minimis exemption for China and Hong Kong. These actions didn't just raise costs — they triggered a full-scale sourcing rethink. Suddenly, it wasn't just about how much duty a brand might pay but it became about whether a supplier could even get product into the U.S. without risking seizures, delays, or penalty audits.
For brands with significant exposure to Asia, the stakes are high. Many Asian countries, including but not limited to China, remain key producers of synthetic fabrics, zippers, trims, and garment-ready blanks. Even brands that don’t manufacture in countries with high tariffs often source raw materials there and those components are now facing new scrutiny, especially under “substantial transformation” rules.
Tariffs are also impacting fiber selection. Polyester-heavy blends, novelty wovens, laces, and technical knits are all disproportionately impacted due to their synthetic content and origin. This shift is forcing many product teams to re-examine not just where garments are made, but what they're made from.
The kicker is that this time, brands can't wait it out. We aren't experiencing temporary surcharges; these structural shifts in how trade is governed. That means brands must build sourcing strategies that assume tariffs are here to stay even if they’re changing hour by hour and that agility, diversification, and compliance are now as important as price.
Past Carmen - I originally wrote this piece at the end of May. As of mid-June, tariffs on Chinese exports have returned to 55 percent, up from the temporary 30 percent rate that was in place starting May 12. This shift highlights how quickly trade policy can change and why sourcing teams need to stay agile in an unpredictable landscape.
The Strategic Pivot: How Brands Are Reacting
For many sourcing teams, the first half of 2025 has felt like redoing three years of work in just three months. The sheer speed at which brands are pivoting their strategies underscores how dependent the status quo had become on stable tariff structures.
The initial response from most companies has been triage: identifying areas of highest exposure and rapidly modeling cost implications. But once the numbers are in, the harder step begins—rerouting the supply chain.
Some brands are leaning into a "+1" model, where a high-tariff country remains part of the garment equation through fabric or trim, while finished goods production is moved to duty-free or lower-tariff countries. This approach helps preserve key mill relationships while reducing total landed cost exposure. Others are going even further, reallocating entire programs to regions that can leverage free trade agreements like CAFTA or benefit from proximity to U.S. ports.
Speed-to-market and duty optimization are now fully intertwined. Brands that once prioritized capacity, price, or innovation above all else are reordering their sourcing hierarchy. That means:
Swapping novelty for consistency
Trading long lead times for regional agility
Reconsidering FOB (Free on Board) structures to reduce duty exposure on high-value inputs
In this context, FOB refers to the price of goods at the point they’re loaded for export—typically including manufacturing and local transport, but not overseas shipping, duties, or inland freight. Rethinking FOB means more than just cost negotiations; it involves tracing where value is added—like fabric, trims, or packaging—and understanding how that breakdown affects duty rates under rules like “substantial transformation.” Where your inputs come from, and where they’re assembled, now matters more than ever.
For example, a tee program that previously sourced both fabric and sewing in China may now see its fabric sourced from a mill in Taiwan and garments assembled in Guatemala even if the price is slightly higher. Why? Because avoiding a 32% tariff and two-week customs delay outweighs a 5-10% increase in unit cost.
We're also seeing increased investment in bonded warehouse setups and dual-sourcing strategies both of which allow brands to remain flexible as policies continue to shift. In some cases, hearing from industry friends we’re seeing companies restructuring internal calendars and giving development teams more lead time to test different regional options before committing to bulk.
What's clear is that this isn't just a sourcing team problem. Merchandising, costing, product development, legal, and sustainability teams are all now sitting at the same table because tariff mitigation affects all of them.
And if they aren't already collaborating, they're falling behind.
The Fabric-First Approach: Reclaiming Material Strategy as a Competitive Edge
If tariffs are changing how brands think about sourcing, then fabric is the new frontline. And for the first time in years, we're seeing brands move back toward a fabric-first approach, not just for creative direction, but for cost survival.
Over the past decade, fast fashion's rise deprioritized long-term material strategies. Fabric was often treated as a commodity an afterthought to silhouette or trend. But in a tariff-heavy world, fabric isn't just part of the cost equation; it is the cost equation.
Here's what that looks like in practice:
Teams are recalculating duty rates by fiber content and origin.
Polyester-dominant blends are being reevaluated, especially when sourced from or manufactured in Asia.
Core programs are shifting toward cotton and other duty-favorable or regional fiber systems.
Fabric development calendars are getting longer, not shorter to allow time for dual sourcing, compliance checks, and fallback options.
Brands are also consolidating their material palettes. Instead of running dozens of novelty fabrics per season, many are simplifying and standardizing by investing in fewer, more flexible core fabrics that can be recolored, restyled, or used across multiple categories. This not only lowers development costs but also enables faster shifts between regions if sourcing disruptions occur.
Take, for example, a core jersey program. In 2023, a brand may have had three versions of that fabric: one for athleisure, one for lounge, and one for kids. Today? They're developing one universal version with consistent duty treatment, quality standards, and performance across end uses.
In a way, tariffs are forcing brands to do what fabric developers have always advocated:
Be proactive
Build smarter materials
Stop chasing cost at the expense of long-term planning.
It's a shift that re-centers the role of fabric in retail strategy and gives material teams new influence. But it only works if everyone understands why that sourcing shift is necessary and how it's connected to broader brand goals.
Because when fabric teams are aligned with sourcing, costing, and design, they're not just reacting to tariffs. They're using material strategy as a way to stay ahead of them.
Where Sourcing Is Headed: New Hubs, Familiar Risks
As brands shift away from high-tariff regions, the question is not just where they will go. It is how fast they can move, and whether the next wave of sourcing hubs will solve more problems than they create.
Central America and Mexico have become top choices for nearshoring, thanks to their proximity to the U.S., favorable trade agreements like CAFTA-DR and USMCA, and growing vertical capabilities. For basics and quick-turn replenishment styles, the region offers a compelling mix of speed and tariff relief. However, capacity is tight, and competition is heating up. Mills are stretched thin, and cut-and-sew operations are nearing saturation.
Some brands are also exploring Made in USA more seriously, particularly for small-batch, high-margin, or seasonless categories. Domestic manufacturing offers unmatched speed-to-market and simplifies compliance. Los Angeles remains a hub for this kind of production, especially in categories like denim, basics, and activewear, thanks to its deep bench of sewing contractors, dye houses, and vertically integrated partners. However, scaling U.S. production presents challenges. Labor shortages remain common, input costs are high, and there is limited mill infrastructure, particularly for synthetics and novelty textiles. For now, it is a valuable tool for specific product types rather than a comprehensive solution.
Beyond the usual players, several countries are beginning to stand out. These are not just backups but strategic long-term partners for brands looking to diversify and reduce supply chain risk:
India: A rising force for cotton-rich programs, embroidery, block printing, and artisanal finishes. While infrastructure can be inconsistent and lead times longer, its textile heritage and skilled labor pool make it an increasingly important hub for value-added product.
Turkey and North Africa: Longtime sourcing centers for European brands, now gaining interest from U.S. companies as well. These regions offer fast lead times, regional fabric access, and duty-free entry to Europe.
Indonesia and Bangladesh: Known for price competitiveness and scale, especially in categories like knits and wovens. Indonesia’s expanding capabilities in synthetics and Bangladesh’s evolving compliance and infrastructure investments are making them more attractive for brands seeking volume with more reliability.
Philippines and Sri Lanka: Often overlooked, both countries offer specialized manufacturing. The Philippines has strengths in technical and performance wear, while Sri Lanka is known for intimates and activewear. Political stability and strong labor protections have made them under-the-radar choices for certain categories.
Still, every new hub comes with trade-offs. Moving production means navigating new minimum order quantity expectations, adapting to cultural and communication differences, and verifying compliance standards. Brands that rush transitions often encounter hidden costs, delays, inconsistent quality, or capacity mismatches.
The key lesson is that sourcing is not plug-and-play. Just because a country has open capacity does not mean it has the right capacity for your product or pace.
What Smaller Brands Can Do: Surviving (and Thriving) Without Scale
For large retailers, tariff pivots are tough but manageable. They have the volume, the vendor relationships, and the internal infrastructure to weather disruptions. But for small to mid-sized brands? The 2025 sourcing landscape can feel overwhelming. Higher costs, stricter import enforcement, and fewer low-barrier regions mean the old DTC playbook doesn't apply anymore. But that doesn't mean smaller brands are doomed, on the contrary I believe that small brands can be more agile if they play to their strengths.
The most successful small brands this year are the ones leaning into three core strategies:
Be Fabric-First from Day One. Instead of chasing low-cost, fully-finished garments from overseas marketplaces (often seen my influencer brands), they're working directly with mills and consolidators to lock in duty-compliant, regionally versatile fabrics. This allows them to build collections that work across multiple factories or even countries without restarting development from scratch. If you’re a small brand without an in-house fabric development expert, now is the time to invest in one.
Build a Tight Assortment, Not a Wide One. Tariffs have made novelty more expensive and risky. Small brands are responding by focusing on a few great fabrics styles that they can repeat, tweak, and grow gradually. This tight edit reduces exposure to MOQ challenges and helps them justify deeper partnerships with factories that may otherwise prioritize higher-volume clients.
Get Smart on Compliance. Gone are the days of vague origin stories and half-understood logistics chains. Today's small brands need to know exactly where their goods are made, what duties apply, and what backup plans exist if a country or input becomes restricted. That doesn't mean hiring a whole legal team, it means asking the right questions, reading the HTS codes, and working with agents who prioritize transparency.
There's also a mental shift underway. In the past, "scrappy" often meant taking whatever was cheapest and getting it live as fast as possible. But in 2025, scrappy means strategic. It means knowing your duty thresholds, understanding the cost implications of your trim choices, and building slower but smarter.
If there's one silver lining, it's that tariff chaos is leveling the playing field in some ways. Big brands are bogged down by scale. Small brands? They can move. And the ones who move with intention are carving out space in a market that's desperately seeking clarity.
Conclusion: The New Fabric Map — Slower, Smarter, More Strategic
Tariffs may have kicked off the reshuffling, but what we're witnessing in 2025 is much bigger than a reaction to policy. It's a recalibration of how the industry works from the fiber to the factory to the final price tag.
For years, speed and cost were the twin pillars of apparel strategy. Now, they've been joined by considerations of origin, compliance, and long-term stability. That's a profound shift, especially for fabric and product development teams that have often operated behind the scenes.
This new sourcing map isn't linear. It's regional, layered, and intentional while still trying to be faster and more flexible. Fabric decisions aren't just aesthetic, they're fiscal and geopolitical. And brands that once saw sourcing as a static playbook are now realizing it's a living system that requires constant recalibration.
What comes next? Expect more companies to:
Develop dual-source fabric strategies.
Consolidate trims and materials to reduce compliance risk.
Prioritize nearshoring not just for speed, but for transparency.
Extend product calendars to allow for smarter mill onboarding and material vetting.
More importantly, expect a cultural shift. One where teams across functions, from design to logistics, have a shared language around sourcing strategy. One where tariffs aren't seen as disruptions, but as design constraints that can lead to smarter, sharper assortments.
🧵 Join the Conversation
Are you seeing your sourcing strategy shift in 2025? Whether you're working with mills or managing compliance, I’d love to hear how your team is adapting.
🔜 Up Next
In the final post of the month, I’m getting personal. I’ll reflect on what it’s been like to build a career in fabric development during a time of constant disruption—and how I’ve learned to thrive in the unknown.