About $300 million in imports to the United States changed country of origin last year—the likely result of volatile tariff policy perpetuated by the Trump administration. Still, even with all the fluctuations in sourcing patterns, U.S. manufacturing output remained essentially flat.
At the same time, manufactured goods imports increased from around $2.85 trillion in 2024 to around $2.98 trillion in 2025—a 4.6 percent jump, according to Kearney’s latest Reshoring Index.
The primary benefactors of that new business were low-cost Asian countries and regions including China, which collectively saw their imports to the U.S. increase by 6 percent. Apparel and accessories imports from the region totaled $88 billion in 2025.
Despite promises that tariffs on these precise trading partners would deter brands from buying and usher in a renaissance for U.S. producers, onshore manufactured goods output (MGO) actually decreased overall by 0.4 percent, or $28 billion. The numbers were even more stark for the apparel sector, which saw MGO fall by 17 percent.
While 75 percent of respondents to the Reshoring Index survey reported pulling sourcing out of China, their business moved regionally to other low-cost Asian countries rather than moving back home. Just 20 percent said they even considered domestic manufacturing.
According to Patrick Van den Bossche, a partner in management consultant Kearney’s Strategic Operations Practice who authored the 2026 Reshoring Index, there are several reasons that apparel imports continue to outpace the growth of domestic production.
“I think there are a couple of things that are different from other industries. First and foremost, I think it’s probably still one of the industries with the lowest [research and development] budgets out there,” he told Sourcing Journal.
When it comes to innovation, like the automation of processes that are currently executed by hand (or by machines directly controlled by hands), “the speed with which I see that happen in other industries is quite a bit higher,” Van den Bossche said. “And that is required to get some of the expensive labor out.”
Then, there’s the fact that “apparel has always been a low margin industry”—a truth as old as time. “You have a whole bunch of elements here, just from a financial perspective, that make it hard for this industry to go through the kind of changes that would need to happen to make it fit for U.S. manufacturing again.”
Offshore sourcing ecosystems for apparel are also deeply embedded after decades of Asia dominance, Kearney’s research surmised. The entrenchment of those supply chains may have been underestimated by proponents of nearshoring and onshoring, while the impacts of higher tariffs may have been overestimated.
Most Asian and Southeast Asian nations were hit with “reciprocal” tariffs that hovered around 20 percent, but the cost pressures were spread throughout the supply chain, with producers bearing some of the burden. As a result, many brands surmised that paying double-digit duties was more cost effective than shifting production to the U.S.
“I think the way it was done created so much turmoil and so much uncertainty that it made it really difficult for company executives to make decisions,” Van den Bossche said of Washington’s tariff strategy, which, throughout 2025, seemed to change weekly.
“Therefore, they went with the least risky one, which is just do more we’ve been doing,” he said. Companies sourcing from Asia remained in Asia, though they did diversify across a number of markets there.
One CEO who responded to the Reshoring Index survey explained, “Our manufacturing teams are ready to run onto the field, we just need the goal posts to stop moving.”
Van den Bossche believes there’s a chance the shifting of goal posts could stop when the U.S. Trade Representative’s Section 301 investigations into forced labor in supply chains and industrial excess capacity wrap up—the administration’s goal being to reconstitute its now-defunct International Emergency Economic Powers Act (IEEPA) duties.
“We have no clue what that will look like until it’s here, but that could create some level of stability where people go, ‘All right, it’s for real now, and these can’t be challenged or hung up in the Supreme Court, so we can believe that this is a new reality and we can plan for that and execute against it,’” he said. “Or it could be done again in the same wild west manner… and we’re back to nothing but a cloud of dust, where nobody sees where they’re going.”
