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SJ Fall Summit: Western Hemisphere Sourcing Has a Tariff Advantage. But Can It Actually Scale?

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SJ Fall Summit: Western Hemisphere Sourcing Has a Tariff Advantage. But Can It Actually Scale?

Despite the growing appeal of nearshoring amid shifting U.S. trade policy, fashion companies are still struggling to scale sourcing across the Western Hemisphere.

The region offers clear advantages, including duty-free access under multiple trade agreements and shorter lead times to the U.S. But a lack of textile and component manufacturing, complicated rules of origin and continued uncertainty around those agreements are limiting how far brands can shift sourcing from Asia, observed apparel trade specialists during a panel at the Sourcing Journal Fall Summit on Sept. 29.

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Even after the Trump administration’s wave of tariffs in 2025, free trade agreements like the United States-Mexico-Canada Agreement (USMCA) and the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) have not driven a mass migration of apparel manufacturing to duty-free trade partners in North and South America.

“It’s not like in the old days, when a free trade agreement was supposed to be permanent,” said Sheng Lu, professor and graduate director, fashion and apparel studies, University of Delaware, during the panel. Lu noted that the uncertainty of the USMCA, which the U.S. declined to renew in July, “will hold back a lot of long-term investment and commitment to sourcing from the region.”

S. S. 2 percent of apparel imports countries entered under free trade agreements in the first five months of 2026.



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