US Tariff Watch 2026: How Apparel Import Duties
Are Reshaping Manufacturing

Where US apparel tariffs stand in September 2026

On 24 July the flat 10% surcharge under Section 122 expired and a Section 301 forced-labor duty started in the same minute. It sorts countries by behaviour rather than by product: an economy that imposes and enforces a ban on forced-labour imports pays 10%, one that does not pays 12.5% (USTR).

That stacks on the normal rate — a cotton knit T-shirt already carries 16.5% — so the all-in figure runs from 26.5% to 36.5% depending on where it was cut. The chart places every major origin.

Three lanes pay nothing extra: qualifying CAFTA-DR apparel, USMCA-qualifying Mexican and Canadian goods, and EU, Japanese, Korean, Taiwanese and Swiss apparel, where the normal rate already exceeds the cap. Full mechanics in the piece we ran when the action landed.

Hold on to one number. 2.5 points is the entire duty difference between the two Asian tiers.

The duty-free quota that was due September 1

The memorandum behind the action carries a second instruction. “As soon as the Trade Representative determines that it is feasible,” USTR is to establish those quotas — three years initially, sized by how much US cotton and fabric each economy buys (Federal Register notice).

“As soon as feasible” is not a date. USTR's signalling put it near 1 September, and CBP told filers the full 10% applies until then (Kelley Drye). As of this week USTR's notices page still shows nothing on it.

So the four countries named as beneficiaries are, right now, paying exactly what everyone else in their tier pays. A Spring ’27 cost sheet with a duty-free Cambodia line on it is holding a number with no legal text behind it.

Worth conceding: when it lands it will be genuinely valuable, particularly for brands already running US-cotton programmes. The mistake is not watching for it. It is pricing it in early.

“A rate you can look up is a cost. A rate you are expecting is a bet.”

How clothing import duties hit your landed cost

Duty is charged on the declared value of the goods, not on what you sell them for. Take a 5,000-piece run of a cotton tee at $14 FOB (the price at the exporting port, before freight) — $70,000 on the invoice.

The gap between the two big Asian tiers is $1,750 on that run. Real money, and worth costing properly. But it is not the number that should decide where a collection is made — moving an origin to capture it usually costs more than that in sampling, fit correction and a first-run yield hit.

China is a different argument. $7,000 on one style at one size run is structural, not a rounding error.

Why the sourcing map moved when the rates didn't

Here is what makes the rate a poor predictor. US apparel imports for January to July 2026 came to $41.83 billion, down 8.65% on the year (OTEXA data via The Daily Star).

Underneath it: China down 34.2% to $4.55bn. India down 25.8% to $2.45bn. Bangladesh down 6.5% to $4.66bn, enough to pass China again. Vietnam roughly flat at −1.03% and still the largest supplier. Cambodia up 10.5%, Indonesia up 2.8%.

Read India and Vietnam next to each other. India sits in the cheaper 10% lane and lost a quarter of its US volume. Vietnam pays 2.5 points more and barely moved.

Duty is not what is driving this. Capacity, lead-time reliability, whether a factory has passed a US compliance audit, and a country's wider trade position all outweigh 2.5 points. Brands are spreading production across origins because they do not want to re-tool twice in one year — not because one column is cheaper. Our second-origin costing piece walks the arithmetic of adding one properly.

Pricing tariff risk in before the Spring ’27 buys

Model the rate as a range, not a figure. Cost every style at its current lane, then re-cost it at the tier above. If the higher number still clears your margin floor, the tariff is not your risk; if it does not, you have a pricing problem the tariff merely exposed.

Three things to watch through Q4: whether USTR publishes the quota rules and how volumes get allocated; whether any 12.5% economy passes an enforcement law and drops a lane, as six did between the June proposal and the July final notice; and whether your CAFTA-DR or USMCA claim actually holds under the yarn-forward rule (the yarn and the fabric both have to originate inside the bloc). That last one catches people — shipping from Mexico is not the same as qualifying under USMCA, and the difference is the whole exemption.

None of this justifies moving production by itself; India's year shows how little the rate explains. It justifies knowing which lane every style sits in. If you are re-costing for Spring ’27, which style would you check first?

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