The 2026 USFIA benchmarking study shows tariffs remain the industry’s dominant concern, while sourcing diversification, compliance capability and data-driven talent move higher on executive agendas.
US fashion companies are adapting to a business environment shaped by elevated tariffs, rising sourcing costs and increasingly complex supply-chain regulation, according to the newly released 2026 Fashion Industry Benchmarking Study.
Produced by University of Delaware Professor Sheng Lu and Graduate Instructor Emilie Delaye in collaboration with the United States Fashion Industry Association, the study surveyed sourcing executives from 30 leading US brands and retailers between April and June 2026. Some 80% of participating companies employed more than 1,000 people.
Tariffs dominate the risk register
Protectionist US trade policies and related uncertainty were ranked among the two most important business challenges by 92% of respondents. Concerns over production costs, foreign protectionism and forced-labour exposure also intensified.
Companies reported broader negative effects from tariffs than a year earlier, including weaker financial performance, higher sourcing costs and fewer resources for sustainability and product innovation. Yet the study found little evidence that higher duties are generating substantial US apparel reshoring: only about 10% cited increased “Made in USA” sourcing as a tariff-response strategy.
Diversification becomes more deliberate
Respondents sourced apparel from 49 countries in 2026, up from 46 in 2025. Around 65% of large companies used at least ten sourcing markets.
Asia remains dominant, but utilisation of China, Vietnam and Bangladesh declined, while sourcing expanded from Guatemala, Egypt and Jordan. Rather than replacing one country with another, buyers are increasingly balancing capacity, flexibility, inventory agility and regional exposure across wider supplier portfolios.
China’s role continued to contract: only 12% sourced more than 30% of their apparel there, while most sourced below 10%. Nevertheless, respondents still recognised China’s advantages in cost, low minimums, flexibility and vertical manufacturing capability.
Talent priorities reveal the next operating model
Although five-year industry optimism fell to 62%, its lowest recorded level in the survey series, 87% of respondents plan to increase hiring. Demand is strongest for data scientists, trade-compliance professionals and environmental-sustainability specialists.
The study suggests that competitive sourcing will increasingly depend on tariff engineering, traceability, analytics and supplier resilience. The next test is whether companies can build these capabilities without sacrificing speed, innovation or affordability.
