Apparel Manufacturers NAICS 3152

Nov 21, 2025 - Apparel Manufacturers Grapple with Tariff Ripple Effects

• Apparel manufacturers are facing significant disruption from US tariffs, which have sharply increased costs and reshaped sourcing strategies, according to a report in the Business of Fashion (BOF). The BoF–McKinsey State of Fashion 2026 report showed that duties on apparel and footwear imports spiked from 13% to 54% in spring 2025 before easing to 36%, above historical norms. With the US importing 89% of apparel and leather goods, manufacturers are among the hardest hit. Some 76% of fashion executives say tariffs and trade disruptions will be the key factors shaping the industry in 2026. Supply chains are shifting: US imports from Cambodia rose 42% between 2019 to 2024, while imports from China fell 30%. To offset margin pressures, brands are raising prices, renegotiating supplier terms, and streamlining assortments. Manufacturers are diversifying production footprints, with expansions into Vietnam and Kenya, underscoring the need for agility in a volatile trade environment.
• Softening consumer sentiment and confidence in November and October 2025 reflects a growing weakness in discretionary spending, posing challenges for US apparel manufacturers. The University of Michigan’s Index of Consumer Sentiment dropped 6.2% month-over-month in November's preliminary results to 50.3, a 29.9% year-over-year decline. The Current Economic Conditions Index fell to 52.3, and the Expectations Index to 49, down 36.3% annually. Year-ahead inflation expectations rose to 4.7%, while long-run expectations declined to 3.6%, with increased uncertainty across both horizons. Meanwhile, the Conference Board’s Consumer Confidence Index edged down to 94.6 from 95.6 in October, as improved current conditions (Present Situation Index up to 129.3) were offset by weaker short-term expectations (Expectations Index down to 71.5). Inflation expectations rose to 5.9%, and over half of consumers anticipated higher interest rates. Holiday spending is projected to fall, with promotions driving purchasing decisions.

• According to a Reuters report, US apparel retailers such as Levi’s, Aritzia, Ralph Lauren, and Under Armour are increasingly testing full-price strategies, driven by resilient demand from affluent consumers. Despite rising tariffs and economic uncertainty, wealthier shoppers, buoyed by stock market gains and low debt, continue spending, with minimal resistance to price hikes. Retailers are leveraging consumer data to fine-tune promotions regionally, preserving margins while limiting broad discounts. This shift reflects a strategic pivot toward high-income, loyal customer bases and suggests a reduced reliance on traditional markdown cycles. The trend signals a potential recalibration of pricing models. Manufacturers may benefit from more stable production planning, reduced pressure to overproduce for discounting, and stronger brand positioning. It also underscores the importance of aligning product development and marketing with premium consumer segments and leveraging data analytics to support dynamic pricing strategies.
• The Apparel, Leather & Allied Products manufacturing industry is one of a dozen manufacturing industries reporting contraction in October’s Manufacturing ISM Report on Business. The Apparel, Leather & Allied Products manufacturing reported a decline in new orders, a decrease in production, lower employment, higher inventories, lower new export orders, and higher prices for raw materials in October. Additional manufacturing industries reporting contraction during the period were; Furniture and Related Products; Textile Mills; Paper Products; Printing & Related Support Activities; Wood Products; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Chemical Products; Machinery; Miscellaneous Manufacturing; and Computer & Electronic Products. Industries reporting growth were Primary Metals; Food, Beverage & Tobacco Products; Transportation Equipment; Plastics & Rubber Products; Fabricated Metal Products; and Nonmetallic Mineral Products. Overall, economic activity in the manufacturing sector contracted for the eighth consecutive month in October, with the Manufacturing PMI registering 48.7%.