USFIA Survey Reflects Companies' Continued Plans to Diversify Sourcing Countries
A July benchmarking survey from the U.S. Fashion Industry Association found that executives from 25 leading U.S. fashion companies have been diversifying their sourcing as part of a wider strategy to hedge against higher tariffs and U.S. trade policy uncertainties.
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The survey, released July 29, found that over 80% of respondents plan to add more countries and regions as potential sources, while 72% are considering increasing their use of duty-free sourcing from the 14 countries that have free trade agreements or the three countries that have major trade preference programs with the U.S.
The survey also said that nearly 60% plan to source apparel from more countries, while 40% plan to source from more suppliers or vendors.
"Reducing sourcing risk, especially to minimize the impact of rising tariffs and tariff uncertainty, is a key driver of companies’ sourcing diversification strategies," said the report on the survey, which occurred from April to June 2025. Respondents -- around 90% of whom were companies with over 1,000 employees -- reflected a mix of retailers, brands and importers/wholesalers.
Diversification away from China and toward other Asian countries appears to be a continuing trend. For instance, in 2025, over 60% of respondents allocated more than 30% of their apparel sourcing orders to Vietnam and Bangladesh combined, compared with approximately one-third of respondents in 2024, according to the survey.
More than 60% of respondents plan to expand sourcing to Indonesia, India and Cambodia over the next two years, the survey said. These countries accounted for about 18.5% of U.S. apparel imports for the first five months of 2025, up from 17.1% for the same period in 2024.
"Respondents generally believe that these countries have already developed considerable apparel production capacity and can serve as immediate alternatives to the traditional top three suppliers," the survey said. "Compared to China, these three countries also present relatively lower sourcing risks, making them attractive options for fashion companies seeking to mitigate risk through diversification."
In contrast, a "record-high" 60% of respondents reported sourcing less than 10% of their apparel products from China, compared with 40% of respondents in 2024, the survey said. The survey also found that approximately 70% of respondents no longer use China as their top apparel supplier, compared with 60% of respondents in 2024.
Beyond Asia, other "emerging destinations" include those that have free-trade agreements or trade preference programs with the U.S., such as Jordan, Peru and Colombia. About 44% of respondents explicitly said they would expand sourcing from the Western Hemisphere. That figure isn't higher because bottlenecks of limited textile raw supply and a lack of product variety are among the factors that stymie production in the Western Hemisphere, the survey said.
As companies continue pursuing interest in sourcing from Asian countries, the tariffs and evolving U.S. trade policies haven't seemed to significantly shift textile sourcing toward the U.S., the survey noted.
"No clear evidence indicates that the Trump Administration’s tariff policy has successfully encouraged U.S. fashion companies to increase domestic sourcing of 'Made in the USA' textile and apparel products or to expand sourcing from the Western Hemisphere," the survey said, finding that only 17% plan to source more textiles and apparel from the U.S. amid the tariff increase.
What the U.S. tariffs have done instead is delay or cancel some sourcing orders for nearly 70% of respondents, as well as reduce investments in areas such as sustainability or product innovation for around 40% of respondents, according to the survey.