US has imposed a universal 10 per cent import tariff from April 5, with additional country-specific tariffs from April 9.
Tariff impact on textile trade and exporting nations will be noteworthy, especially on Vietnam, China and India, which face steep hikes.
While Mexico and Canada benefit from USMCA protection, Türkiye and Germany may seize opportunities in premium segments.
Table 1: Top 15 countries exporting textiles to the US, their new tariffs and % changes
Source: TexPro
*N/A refers to the introduction of a new 25 per cent tariff on South Korea, replacing the previous 0 per cent tariff, indicating no percentage change in the context of the data.
Figure 1
Source: TexPro
India
India, another major textile exporter, is set to face a significant tariff hike—from 4.57 per cent to 30.57 per cent—a 669 per cent increase. This sharp escalation will place considerable cost pressures on Indian textile exports, potentially reducing their competitiveness in the US market. In 2024, India exported textiles worth $2,768.75 million to the US, and this increase may prompt US buyers to explore alternative sources with more favourable tariff structures.
India’s textile industry holds a vital place in its economy, contributing approximately 2.3 per cent to the national GDP and serving as the second-largest employment sector after agriculture. The country also boasts an abundance of raw materials—particularly cotton, one of its largest exports—which it supplies to major global economies, including the US.
While the new tariffs under Trump’s trade policy may be comparatively lower for India than for China, they could still lead to localised disruptions, including labour displacement within the industry. However, India may be better positioned to weather the impact due to several mitigating factors. These include its relatively lower tariff rates compared to China, as well as continued US reliance on critical Indian raw materials like cotton.
Moreover, India’s comparatively favourable trade position could make it an attractive destination for foreign investment, especially as global companies seek to diversify their sourcing and production bases. This shift may lead to increased foreign direct investment (FDI) in the Indian textile sector, helping to offset some of the short-term challenges posed by the tariff hike.
China
China, one of the world’s largest textile exporters, is facing a dramatic tariff hike from 4.4 per cent to 38.4 per cent—an 873 per cent increase. This sharp rise in tariffs will significantly raise the cost of Chinese textile exports to the US, prompting American importers to seek alternative sourcing options. Such a move could seriously challenge China’s longstanding dominance in the US textile market. In 2024 alone, China exported $2,541.07 million worth of textiles to the US, and this surge in tariffs puts that trade at risk.
The US has made its strategic intentions clear—targeting China’s export-dependent economy where it is most vulnerable. China’s competitive edge in the global textile industry has long been its cost-effectiveness. However, this advantage will be undermined by the steep tariff increases.
Given China’s vast capacity to produce intermediate goods, the likelihood of oversupply is high. This surplus may lead to dumping in other markets, particularly in least developed countries (LDCs) across Central Asia and Africa—regions where Chinese textile products already enjoy strong market presence.
Furthermore, the impact of Rules of Origin will be significant for US-Mexico-Canada Agreement (USMCA) member nations. China’s ability to indirectly access the US market via finished garments produced in Mexico or Canada could be curtailed, as the US is likely to enforce strict origin-based restrictions.
As a result, China may struggle to reallocate its excess textile production, facing both declining access to premium markets and rising global competition.
Turkiye
Turkiye’s textile exports to the US will see a moderate tariff increase—from 4.92 per cent to 14.92 per cent—a 303 per cent rise. Despite this jump, Turkiye may be able to maintain its competitive edge in the US market, particularly in high-value textile segments where it has established a strong reputation. In 2024, Turkiye exported $620,318 million worth of textiles to the US, and the new tariff could, paradoxically, open a window of opportunity for Turkiye to expand its market share as other exporters face steeper hikes.
Turkiye is known for its high-quality textiles, which continue to perform well in markets such as the European Union due to geographic proximity and strong trade ties. While its US presence has historically been more limited, the relatively modest tariff hike compared to other countries could allow Turkish exporters to strengthen their foothold in the American market, especially as US buyers look to diversify away from China and Vietnam.
Domestically, easing inflation and expected interest rate cuts in Turkiye could stimulate investment across sectors, including textiles. The industry is a cornerstone of the Turkish economy, contributing 15.2 per cent of manufacturing output and employing 27.8 per cent of the manufacturing labour force. With increased domestic stability and strategic export positioning, Turkiye is well-placed to weather tariff pressures and potentially grow its presence in the US textile market.
Mexico
Mexico stands out in the current tariff landscape, with no additional tariffs imposed and its textile exports continuing to benefit from a 0 per cent tariff rate under the USMCA. However, the newly introduced universal 10 per cent tariff—effective April 5, 2025—will still impact Mexico’s price competitiveness in the US market. Despite this added cost, Mexico’s geographic proximity to the US, coupled with favourable trade agreements, may help it retain a competitive edge. In 2024, Mexico exported $1,162.78 million worth of textiles to the US, and this close economic relationship is expected to continue playing in its favour.
While Mexico currently enjoys tariff-free access under the USMCA, it remains in a delicate position. The Trump administration has already flagged potential shortcomings in certain provisions of the agreement, which could put future trade benefits at risk.
One key requirement of the USMCA is that qualifying goods must be produced using regional inputs. This means Mexico must increasingly rely on US or domestic raw materials—such as yarn and fabric—to ensure continued eligibility for zero-tariff access. Any deviation from this, especially involving foreign intermediate goods, could lead to trade complications.
A growing concern is the surge of Chinese businesses establishing operations in Mexico to assemble goods using local labour, aiming to exploit Mexico’s tariff-free access to the US market. According to trade monitoring firm QIMA, this strategy is being used to circumvent US tariffs on Chinese-made products. As a result, US customs authorities may increase scrutiny and inspections of Mexican textile imports, particularly those suspected of containing Chinese-origin intermediate products. Such measures could slow down supply chains and create compliance hurdles for Mexican exporters.
South Korea
South Korea’s textile exports are set to face a new 25 per cent tariff, up from the previous 0 per cent rate. This sharp increase marks a significant shift and is likely to impact the competitiveness of South Korean textiles, particularly for exporters that rely heavily on the US market. In 2024, South Korea exported $963.18 million worth of textiles to the US, and the new tariff could reduce its market share significantly.
While the tariff is a notable setback, South Korea may still find opportunities amid the broader disruptions caused by the US-driven trade realignment. Compared to other countries facing even steeper tariff hikes, South Korea’s 25 per cent levy is relatively moderate, and its reputation for high-quality textile production—especially in niche segments like technical textiles and performance fabrics—could help maintain demand from US buyers.
South Korea’s textile industry has long benefitted from zero tariffs, allowing it to develop strong trade ties with the US. The new tariff will test the resilience of this relationship. However, US-based finished goods manufacturers may still prefer South Korean intermediate goods for their reliability, innovation, and premium quality—particularly in specialised applications such as automotive textiles, medical fabrics, and smart wearables.
In the broader context of the trade war, South Korea could also position itself as a stable, reliable alternative to Chinese supply chains, potentially attracting trade and investment from companies seeking to reduce exposure to tariffs and geopolitical risk.
Canada
Canada’s textile exports are set to face no new additional tariffs, with a current 0 per cent tariff rate remaining in place. While this provides a temporary advantage, the introduction of a universal 10 per cent tariff in 2025 will still impact its price competitiveness in the US market. In 2024, Canada exported $885.23 million worth of textiles to the US, and despite the impending tariff increase, Canada’s strong trade agreements and geographic proximity to the US are expected to help it retain a competitive edge.
Trade Relations & USMCA: Canada’s textile sector benefits from the USMCA agreement, which ensures tariff-free access to the US market for qualifying goods. This position is critical, as Canada can continue to export textiles under favourable terms, provided they meet the agreement’s rules of origin, which stipulate the use of regional inputs such as US or Canadian raw materials. The looming 10 per cent tariff, however, will require Canadian textile producers to carefully navigate these regulations to ensure continued eligibility.
Vietnam
Vietnam, a key player in global textile exports, is set to face a substantial tariff hike—from 4.82 per cent to 50.82 per cent—a staggering 1,054 per cent increase. This dramatic rise threatens to severely undermine Vietnam’s competitiveness in the US textile market. In 2024, Viet Nam exported $795.79 million worth of textiles to the US, and the steep tariff increase may force exporters to scale back operations or seek alternative markets.
Textiles are a vital part of Vietnam’s economy, contributing approximately 16 per cent to its GDP. The newly imposed tariffs are likely to have far-reaching consequences—not only for Vietnamese manufacturers but also for US companies that depend on cost-effective Vietnamese intermediate goods in their production processes.
Vietnam has long served as a critical supplier of both finished apparel and intermediate textile goods. The latter are particularly valued by US manufacturers for their affordability and reliability, especially in sectors like industrial textiles, which are essential for the US government’s ambitions to revitalise domestic manufacturing.
The tariff hike will disrupt these supply chains, raising input costs for US apparel producers and potentially slowing down production. This could have a ripple effect across industries that rely on Vietnamese inputs for value-added production within the United States.
Moreover, the sudden erosion of price advantage may force Vietnamese exporters to pivot towards other global markets, reducing their exposure to the US but also risking a drop in overall revenues. For Vietnam, which has built much of its export strength on affordability and scale, the tariffs represent a serious challenge that could alter its long-term trade trajectory.
Germany
Germany will see its textile tariff rate rise sharply from 4.51 per cent to 24.51 per cent—a 543 per cent increase. This substantial hike is expected to significantly affect the price competitiveness of German textiles in the US market. In 2024, Germany exported $692.61 million worth of textiles to the US, and the new tariff structure may force German exporters to reassess their pricing strategies and supply chain dynamics.
Germany, like South Korea, is a global leader in technical textiles—a segment that has become increasingly important as demand for high-performance, specialised fabrics grows. Many of these products were previously produced at lower costs in China. With Chinese exports now facing steeper tariff penalties, Germany may find a limited but valuable opportunity to fill the gap in high-end textile segments.
Although the new 24.51 per cent tariff is a significant burden, it remains lower than those imposed on China (38.4 per cent) and somewhat comparable to South Korea (25 per cent). This relative positioning may give German technical textiles a slight competitive edge—particularly in areas where quality, innovation, and regulatory compliance matter more than price alone.
To remain competitive, German textile firms may need to explore strategies such as optimising supply chains, increasing efficiency, or partnering with US-based manufacturers to reduce cost pressures and maintain market share.
Japan
Japan will see its textile tariff rate increase from 4.81 per cent to 28.81 per cent—a 599 per cent rise. This sharp increase is likely to present significant challenges for Japanese textile exporters, potentially reducing their competitiveness in the US market. In 2024, Japan exported $592.81 million worth of textiles to the US, much of it concentrated in specialised and high-tech applications, including the automotive sector.
Japan’s textile exports are heavily focused on technical and industrial textiles, particularly those used in automobile manufacturing. With the new tariffs in place, the cost of these intermediate goods will rise, leading to higher production costs for US-based car manufacturers. This may result in increased vehicle prices, especially for models reliant on precision-engineered components sourced from Japan.
While Japan is known for its technological excellence and quality, the 28.81 per cent tariff poses a real threat to its export volume to the US, especially as buyers explore more cost-effective alternatives. Major US firms that depend on Japanese technical textiles may need to reassess their supply chains or absorb higher input costs, which could impact profitability and pricing strategies.
Despite these headwinds, Japan’s advanced capabilities in textile innovation may help it retain niche market demand, albeit at reduced volumes, unless trade conditions are renegotiated or mitigated through strategic partnerships.
Taiwan
Taiwan’s textile exports to the US will face a steep tariff hike—from 4.73 per cent to 36.73 per cent—a 777 per cent increase. This sharp rise significantly undermines the competitiveness of Taiwanese textiles in the US market, where they have already been under pressure from lower-cost producers in Asia. In 2024, Taiwan exported $471.16 million worth of textiles to the US, a figure that now stands at risk of significant decline.
Taiwan is among the economies hit hardest by the new tariff regime, and the 36.73 per cent rate could deal a serious blow to its textile industry. Already contending with stiff competition from regional peers such as Vietnam, Bangladesh, and India, Taiwanese manufacturers will struggle to match the pricing flexibility of competitors now facing equal or even lower tariff burdens.
The textile sector in Taiwan, known for producing high-quality and functional fabrics—including performance textiles and specialty materials—may face shrinking demand from US buyers due to the higher landed cost. This could force many exporters to either absorb losses, pass costs onto consumers, or seek alternative markets in regions such as the EU or ASEAN.
Given Taiwan’s smaller export base compared to regional giants, this tariff hike poses a serious threat to the long-term viability of its textile exports to the US. Without strategic interventions—such as technological upgrades, product diversification, or trade partnerships—Taiwan risks losing its foothold in a key market.
Italy
Italy’s textile exports to the US will see a sharp tariff increase, rising from 4.61 per cent to 24.61 per cent, marking a 534 per cent rise. This significant hike will impact Italy’s competitiveness in the US market, especially since Italian textiles are often positioned in higher-end segments, where price sensitivity can be more pronounced. In 2024, Italy exported $455.47 million worth of textiles to the US, and the new tariff structure may require Italian exporters to reassess their pricing strategies.
High-Quality Products: Italy is renowned for its high-quality textiles, particularly in luxury fabrics, fashion, and specialised materials. Despite the steep tariff hike, Italian manufacturers could continue to attract demand in premium market segments where quality, design, and craftsmanship are prioritised over price. This positioning may help mitigate the impact of the tariff increase.
Thailand
Thailand’s textile exports are facing a tariff rise from 4.88 per cent to 40.88 per cent, a staggering 838 per cent increase. This sharp hike will significantly increase the cost of Thai textiles in the US market, potentially making them less attractive to US importers. In 2024, Thailand exported $354.46 million worth of textiles to the US, and this tariff increase could substantially erode Thailand’s competitiveness in the US market.
Cost Competitiveness: The steep rise in tariffs will make Thai textiles more expensive, potentially diminishing their appeal in a price-sensitive market like the US. This could lead to reduced demand for Thai textile products, particularly in commodity or low-cost segments where price is a key factor in purchasing decisions.
United Kingdom
The UK’s textile exports are set to face a significant tariff hike, with rates increasing by 300 per cent—from 4.99 per cent to 14.99 per cent. While this may appear as a moderate rise in percentage terms, the implications for UK exporters could be substantial, particularly in highly competitive markets like the United States, where price sensitivity strongly influences buyer decisions.
In 2024, the UK exported approximately $300.43 million worth of textiles to the US. The increased tariff burden could erode profit margins or force UK suppliers to raise prices, potentially making their products less attractive compared to lower-cost alternatives from other countries. This shift may hinder the UK’s ability to maintain or grow its market share, especially as global competitors vie for dominance in the lucrative US textile sector. Over time, sustained tariff pressures could also discourage investment in export-oriented production and compel UK businesses to reconsider their strategic focus on the US market.
The sharp increase in US tariffs on UK textile exports—from 4.99 per cent to 14.99 per cent—poses significant challenges, including reduced price competitiveness, tighter margins, and potential loss of market share. In response, UK exporters may be forced to raise prices, reconsider US market strategies, scale back investments, and explore alternative trade routes or supply chain realignments.
Netherlands
The Netherlands will see its textile tariff rise from 4.73 per cent to 24.73 per cent, marking a 523 per cent increase. This significant increase will make Dutch textiles more expensive in the US market, potentially reducing their competitiveness, especially in price-sensitive segments. In 2024, the Netherlands exported $290.96 million worth of textiles to the US, and the new tariff structure could prompt Dutch exporters to rethink their pricing and market strategies.
Price Sensitivity: The steep rise in tariffs will likely make Dutch textiles less price-competitive in the US market. US buyers, who are often focused on cost-efficiency, may turn to countries with lower tariffs, such as Mexico, or those offering lower-priced alternatives from Asia.
Specialised and High-Quality Textiles: The Netherlands is known for its advanced textile industry, particularly in specialised areas like technical textiles, performance fabrics, and high-quality design. While the tariff increase will affect the cost structure, Dutch exporters could still find opportunities in higher-end segments where quality, innovation, and sustainability matter more than price. This positioning might allow them to retain some level of demand from US buyers who prioritise premium products.
Pakistan
Pakistan’s textile exports are set to face a steep tariff increase in the US market—from 4.84 per cent to 33.84 per cent—a staggering 699 per cent rise. This dramatic surge is likely to make Pakistani textiles significantly more expensive, potentially dampening demand and undermining the country’s competitiveness in one of its key export destinations. With textile exports to the US valued at $287.62 million in 2024, the impact could be substantial.
The Pakistani textile sector, which contributes 8.5 per cent to the country’s GDP and serves as a major source of employment, is particularly vulnerable to such trade barriers. The situation is further compounded by intense regional competition, especially from India, which benefits from lower US tariff rates on similar textile products. This gives Indian exporters a competitive edge, making it harder for Pakistan to retain market share in the US.
In the short term, Pakistani exporters may be compelled to rework their pricing strategies, absorb losses, or seek alternative markets to offset declining US demand. However, in the long run, Pakistan has an opportunity to reposition itself by investing in production capacity, value addition, and supply chain efficiencies. With Vietnam leaving a narrow gap in global rankings, Pakistan could potentially improve its standing if it leverages innovation and scale to boost competitiveness beyond tariff disadvantages.
The sharp increase in US tariffs on Pakistani textiles—from 4.84 per cent to 33.84 per cent—poses serious challenges for the country’s export sector. The resulting loss of price competitiveness may lead to reduced demand, revenue decline, and increased regional competition, particularly from India. With textiles contributing 8.5 per cent to Pakistan’s GDP and serving as a major employment source, the economic impact could be significant. Exporters may be forced to adjust strategies, seek new markets, or absorb losses in the short term. However, this challenge also presents an opportunity for long-term repositioning through investment in production capacity, innovation, and strategic market diversification.
Conclusion
The introduction of a universal 10 per cent tariff on all imports, alongside steep country-specific tariff hikes, is set to reshape the global textile trade landscape. Countries such as Vietnam and China—facing some of the highest tariff increases—are likely to see a decline in their competitiveness within the US market. This could trigger a realignment of global textile supply chains as buyers seek more cost-effective sourcing options.
In contrast, nations like Mexico and Canada may retain a competitive edge under the protection of existing USMCA agreements, offering some stability amid the broader disruption. Smaller economies, including Pakistan and Taiwan, may find it difficult to absorb the increased costs, potentially losing ground to more favourably positioned competitors. Meanwhile, European exporters like Turkiye and Germany could find new opportunities, particularly in premium and value-added segments where price sensitivity is lower.
Overall, the shifting tariff landscape will compel exporting countries to reassess their strategies—diversifying markets, investing in value addition, or negotiating new trade agreements. These changes are likely to drive long-term shifts in global textile trade patterns, creating both challenges and openings in an increasingly protectionist environment.
Source: TexPro
Fibre2Fashion News Desk (NS)
