Trade dominated industry headlines in 2025. Brands, retailers and sourcing leaders spent the year recalibrating around shifting tariff structures, new bilateral agreements and an increasingly fragmented global supply chain. The focus, understandably, was on the numbers: reduced tariff exposure, improved access and lower-cost pathways for production.
In that mix, trade deals have been celebrated, as they’ve typically come with lower tariff rates — albeit as a result of some hefty concessions. Just last week, we saw the rate for Bangladesh goods tick down 1% to 19%. While that was welcomed, there was a second headline that’s arguably even more impactful. The agreement included the elimination of duties when certain U.S.-made inputs are used. If that sounds familiar, the “Liberation Day” announcement also included exceptions for goods containing a minimum amount of U.S. content.
That shift could have profound ripple effects.
On paper, it’s a simple incentive: use U.S.-made inputs and qualify for tariff relief. In practice, it introduces a much bigger requirement…proof. Companies can’t claim the exemption without demonstrating origin, chain of custody and compliance through documented, auditable systems. That requirement increases the pressure on the industry to adopt traceability as a business necessity.
The impact could extend far beyond compliance.
If these trade incentives drive an uptick in U.S.-sourced fibers and yarns, the consequences could be significant. Consider agriculture. Cotton farmers have been stuck in a punishing cycle of depressed prices, weak demand and a highly volatile market that has made the crop increasingly difficult to sustain. A meaningful increase in domestic cotton utilization driven not by marketing promises but by tariff economics could reverse that trend far faster than anyone expected just a year ago.
As the U.S. trade war made sourcing more challenging and costly, the hope that this particular geopolitical strategy would actually end up helping any sector bolstering the industry here. But incentives have a way of reshaping supply chains quickly when the financial upside is clear.
And that brings us to the bigger point: Traceability is no longer a nice to have. It’s being enforced by regulation and accelerated by trade policy. Whether it’s the Uyghur Forced Labor Prevention Act, which effectively requires traceability for cotton-linked goods entering the U.S., incoming sustainability and circularity legislation, or the various rule of origin stipulations popping up in trade deals,companies will have to invest.
That investment won’t just flow into software platforms. It will drive demand for verification services, auditing infrastructure, supplier onboarding, compliance teams and the human capital required to operationalize traceability at scale.
Through trade, the industry is being pushed toward its most meaningful outcome — visibility.
And in 2026, that visibility won’t be optional. It will be the price of entry.
Edward Hertzman is the founder of Hertzman Global Intelligence.
