The U.S. tariff rates not only vary by sourcing origin but also by fiber composition. Generally, apparel made with cotton fibers will face a lower tariff rate (i.e., around 8-16% Most Favored Nation, MFN tariff rates) than apparel made only from man-made fibers (i.e., around 16-32% MFN tariff rates).
As U.S. fashion companies leverage “tariff engineering” to mitigate the import duty increase, U.S. apparel imports in 2025 included more cotton apparel and fewer of those made from man-made fiber (MMF). Specifically, measured by quantity, cotton apparel (OTEXA category 31) accounted for 39.9% of total U.S. apparel imports in 2025, higher than 38.5% in 2024 and 37.8% in 2023. In comparison, man-made fiber (MMF) apparel accounted for 56.6% of total U.S. apparel imports in 2025, a noticeable decline from 57.9% in 2024 and 59% in 2023.
Furthermore, while Asian countries had demonstrated greater competitiveness in man-made fiber (MMF) clothing, higher tariffs on such products in 2025 led U.S. fashion companies to source fewer MMF clothing from Asia. Notably, in value terms, 73.6% of U.S. MMF clothing came from Asia in 2025, a noticeable decline from 75.1% a year earlier. In comparison, 73.1% of U.S. cotton apparel imports came from Asia in 2025, up from 71.8% in 2024.
In comparison, it is interesting to note that while Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) and United States-Mexico-Canada Agreement (USMCA) members are perceived as more competitive in making and exporting cotton apparel products, due to tariff advantages, U.S. fashion companies imported more man-made fiber (MMF) apparel from the regions in 2025.
The same trend applied to wool apparel imports from the USMCA, which grew by 11.6%. These results suggest that if the tariff gap between U.S. apparel imports from CAFTA-DR and USMCA members and those from Asian countries continues in 2026, it may further incentivize U.S. fashion companies to explore additional MMF apparel sourcing opportunities in the Western Hemisphere.
This incentive could be reinforced by the fact that, since February 2026, apparel imports from many Asian suppliers have been subject to the new Section 122 tariffs, while qualifying apparel products from CAFTA-DR and USMCA remain exempt.
It may also represent a historic opportunity to expand investment in MMF textile manufacturing in CAFTA-DR and USMCA countries, thereby increasing regional production capacity and diversifying product offerings.
Impact on Free Trade Agreement utilization
While there is no clear evidence from trade data showing that U.S. fashion companies expanded near-shoring from the Western Hemisphere in 2025, as a silver lining, the utilization of free trade agreements significantly improved. Specifically, measured in value, about 75.7% of U.S. apparel imports from members of the CAFTA-DR claimed duty-free benefits under the agreement, up from 73.0% in 2024 and 70.5% in 2023. Improved CAFTA-DR utilization in 2025 was driven by a higher volume of imports that met the yarn-forward rules of origin (i.e., up 1.5%). However, the utilization rate of the agreement’s short-supply mechanism decreased from 2.7% to 1.2%, despite more products being added to the list.
Similarly, in value, about 88.7% of U.S. apparel imports from Mexico and Canada claimed duty-free benefits under the USMCA, up from 86.1% in 2024 and 85.7% in 2023. Notably, in the past, only around 20% of U.S. apparel imports from Canada met the yarn-forward rules of origin; however, this percentage increased dramatically to 69.9% in 2025. Since March 2025, USMCA-qualifying products have been exempt from the “reciprocal tariffs” imposed by the Trump administration, which likely encouraged more U.S. apparel imports from Canada to take advantage of the rules.
Dr. Sheng Lu is a Professor & Director of Graduate Studies in the Department of Fashion and Apparel Studies at the University of Delaware. He also served as a consultant for the International Trade Centre (ITC) co-run by the World Trade Organization (WTO) and the United Nations (UN).
