Though US fashion companies are operating this year in a highly uncertain business environment shaped by elevated tariffs, rising sourcing costs, geopolitical tensions and increasingly complex regulatory requirements, compared with 2025, companies are moving beyond short-term crisis response and increasingly adopting longer-term strategies focused on supply chain optimisation, compliance capabilities and operational resilience, a study has revealed.
The ‘2026 Fashion Industry Benchmarking Study’ was conducted by Sheng Lu, professor at the department of fashion & apparel studies at the University of Delaware, and Emilie Delaye, graduate instructor at the University of Delaware, in collaboration with the United States Fashion Industry Association (USFIA).
Consistent with last year’s findings, respondents once again ranked ‘protectionist US trade policies and related policy uncertainty, including the impact of tariffs’ as their top business challenge in 2026.
However, several related concerns intensified this year. Increasing production or sourcing costs rose to the third most significant challenge, while protectionist trade policies and policy uncertainty in foreign countries remained among respondents’ top concerns.
In addition, managing forced-labour risks emerged as a significantly higher priority, rising from tenth place in 2025 to sixth place in 2026.
Despite several changes in U.S. tariff policy during the year, the survey results indicate that tariffs continue to impose broad and evolving impacts on fashion companies’ sourcing and business operations.
More respondents reported negative effects on company financial performance, higher sourcing costs, and reduced resources available for sustainability and product innovation compared with a year ago.
At the same time, companies adopted a broader range of mitigation strategies, including applying for tariff refund.
The survey finds little evidence that higher tariffs have encouraged large-scale reshoring of apparel production to the United States. Only about 10 per cent of respondents identified sourcing more ‘Made in the USA’ products as a strategy to respond to tariff increases.
Meanwhile, respondents were concerned that apparel sourcing under most US free trade agreements and preference programmes also became subject to additional tariff measures.
While most respondents remain optimistic about the five-year outlook for the US fashion industry, a growing share have adopted a more cautious outlook amid persistent economic and policy uncertainty.
While respondents generally expect apparel sourcing volume and value to increase this year, most anticipate only modest growth of lower than 5 per cent.
The optimism about the industry’s long-term outlook continued to somewhat soften. About 62 per cent of respondents expressed optimism regarding the next five years, the lowest level recorded since the study began tracking this measure.
The job market in the fashion sector was a bright spot. About 87 per cent plan to increase hiring over the next five years, up from 75 per cent in the 2025 survey and matching the highest level recorded since the pandemic.
Demand is expected to be strongest for data scientists, trade compliance specialists and environmental sustainability specialists.
Fibre2Fashion News Desk (DS)
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