US fashion companies are moving from rapid diversification towards supplier-network optimisation, while AI, traceability and regional balancing become more influential in sourcing decisions.
The next phase of apparel sourcing will be defined less by finding the cheapest replacement country and more by building resilient, technology-enabled supplier networks, according to the 2026 USFIA Fashion Industry Benchmarking Study.
Based on responses from executives at 30 leading US fashion companies, the study identifies four developments likely to shape sourcing over the next two years: network consolidation, a more stable role for China, selective nearshoring and wider use of artificial intelligence.
Diversification gives way to optimisation
Respondents sourced apparel from 49 countries in 2026, up from 46 in 2025, while approximately 65% of large companies used ten or more sourcing markets.
However, fewer businesses now plan to add countries or vendors. Buyers are instead consolidating suppliers, developing strategic partnerships and balancing capacity, flexibility, inventory agility and regional risk across existing networks. Guatemala, Egypt and Jordan gained utilisation as dependence on China, Vietnam and Bangladesh declined.
China moves towards a smaller, steadier role
Only 12% of respondents sourced more than 30% of their apparel from China, while most placed less than 10% there. China’s share of US apparel imports also fell below Vietnam and Bangladesh.
Yet the survey suggests de-risking may be stabilising. Many companies appear to have reached their preferred exposure level while retaining China for its vertical integration, flexible minimum orders, speed and manufacturing capability.
Nearshoring remains product-limited
CAFTA-DR utilisation rose to 76%, but Western Hemisphere sourcing remains concentrated in basic categories. Planned CAFTA-DR orders centre on T-shirts, cited by 67% of respondents, followed by activewear at 33% and bottoms at 27%.
Insufficient textile variety, uncertain trade policy and limited capability in complex products continue to constrain broader regional expansion.
AI enters the sourcing function
Companies reported using AI in an average of three business areas. Demand forecasting and inventory planning led adoption at 56.3%, while 50% used AI for sustainability tracking, risk management, and sourcing or cost optimisation. Another 43.8% applied it to customs, compliance and tariff management.
The competitive advantage will increasingly favour suppliers that combine dependable capacity with traceability, digital data, flexible production and rapid decision-making.
