The aggressive tariff policies launched by the Trump administration with the promise of reviving "Made in America" have yielded a bitter result for the U.S. textile sector. Instead of ushering in a domestic manufacturing renaissance, the latest data from the 2026 Kearney Reshoring Index reveals a startling trend: U.S. apparel manufacturing output (MGO) actually plummeted by 17 percent throughout 2025.
Despite high tariffs designed to deter dependence on foreign goods, manufactured imports to the U.S. jumped 4.6 percent to approximately $2.98 trillion. The apparel and accessories sector remained dominated by low-cost Asian nations, including China, with imports totaling $88 billion. The very strategy intended to act as a protective shield for domestic producers instead created a "cloud of dust" of uncertainty, leaving corporate executives hesitant to take the massive risk of moving production back home.
Patrick Van den Bossche, a partner at Kearney and author of the report, explained that the apparel industry possesses unique characteristics that make "reshoring" exceptionally difficult. A primary factor is the sector's notoriously low research and development (R&D) budgets. This lack of innovation in automation means the industry remains heavily reliant on manual labor, which is prohibitively expensive in the United States.
"The speed with which I see [automation] happen in other industries is quite a bit higher," Van den Bossche told Sourcing Journal. "And that is required to get some of the expensive labor out." He further noted that the historically thin profit margins in apparel make it financially grueling for the industry to undergo the radical transformation needed to fit the U.S. manufacturing landscape again.
Rather than returning to American soil, major brands chose regional diversification over domestic relocation. While 75 percent of survey respondents reported pulling sourcing out of China, they moved their business to other low-cost Asian neighbors rather than heading home. Only 20 percent of companies even considered domestic manufacturing as a viable option.
The volatility of Washington’s tariff strategy—which reportedly seemed to change on a weekly basis during 2025—is blamed for much of this market paralysis. One CEO responding to the survey captured the frustration with a sharp metaphor: "Our manufacturing teams are ready to run onto the field, we just need the goal posts to stop moving."
As 2026 progresses, the American fashion industry is looking toward the conclusion of Section 301 investigations into labor practices and industrial overcapacity for a sense of stability. Until the "shifting goal posts" are firmly planted, experts fear that domestic apparel manufacturing will continue to shrink, overshadowed by the deeply entrenched and highly efficient supply chain ecosystems of Asia.
