July 2026 update: on July 24 Section 122 expired at its 150-day limit and was replaced by the Section 301 forced-labor tariff — 10% base for most sources, 12.5% for a 46-economy list including China, Vietnam, and Thailand. EU garments moved to the 15% deal ceiling July 1, Mexico stays 0% USMCA. The 37–49% IEEPA rates from April 2025–February 2026 are refundable. Estimate your clothing-tariff refund →
The clothing and textile industry is one of the most globalized sectors of US imports — and one of the most affected by recent tariff swings. While there's no additional sector-specific surcharge on apparel (unlike steel or aluminum), the rules changed dramatically in February 2026 when the Supreme Court struck down the IEEPA reciprocal tariffs, replacing punishing country-specific rates with a flat 10% Section 122 rate. Here's what importers need to know — including which rates are now refundable.
No Sector Surcharge, But Country Rates Bite
Unlike steel (Section 232 at 50%) or autos (25%), clothing faces no additional sector-specific surcharge. Since the Supreme Court struck down the IEEPA reciprocal tariffs in February 2026, the current rate on apparel is the flat 10% base reciprocal tariff — the Section 301 forced-labor tariff that replaced Section 122 on July 24, 2026 — plus the MFN base rate (China, Vietnam, and Thailand sit in the 12.5% tier, and China adds its own product-specific Section 301 duties on top) — not the steep country-specific rates that applied through early 2026. During the IEEPA period (April 2025–February 2026), the major apparel producers faced punishing rates: Bangladesh 37%, Cambodia 49%, Vietnam 46%, Indonesia 32%, and Sri Lanka 44%. Importers who paid those rates between April 2025 and February 2026 are now owed refunds on the IEEPA layer.
Top 10 Apparel-Exporting Countries: Rate Comparison
Current 2026 rates are a flat 10% base reciprocal tariff (the Section 301 forced-labor tariff that replaced Section 122 on July 24, 2026) plus the MFN base for most apparel sources, with key exceptions: Mexico at 0% for USMCA-qualifying garments; China, Vietnam, and Thailand in the 12.5% tier (China also adds its product-specific Section 301, an additional 7.5–100% depending on the product list); and EU countries, which moved to the trade deal's 15% all-inclusive ceiling on July 1, 2026 — and because many apparel MFN rates already run 15–32%, most EU garments simply pay MFN alone with no surcharge. For reference, the pre-SCOTUS IEEPA rates that applied April 2025–February 2026 — and are now refundable — were far higher: Bangladesh 37%, Vietnam 46%, Cambodia 49%, Indonesia 32%, Sri Lanka 44%, Pakistan 29%. The collapse from those rates to a near-uniform 10% base is the single biggest shift in apparel sourcing economics in a decade — and on July 24, 2026 Section 122 expired at its 150-day statutory limit and was replaced by the Section 301 forced-labor tariff: a 10% standard tier for most economies and a 12.5% tier for a 46-economy list that includes China, Vietnam, and Thailand.
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Impact on Fast Fashion and Retail Pricing
Tariffs reshaped clothing prices and sourcing strategies through 2025 and into 2026. During the IEEPA period, a $10 fast-fashion garment from Bangladesh carried roughly $3.70 in tariffs (37%) — versus near-zero before 2025 — compressing margins and pushing retail prices up. Under the current 10% base reciprocal tariff that same garment carries about $1.00, so price pressure has eased since the February 2026 SCOTUS ruling, though clothing inflation built up during the high-tariff period has been slow to unwind. The $800 de minimis elimination for China also continues to affect direct-to-consumer brands using platforms like Shein and Temu.
Nearshoring to Mexico
Mexico has emerged as a major alternative for apparel sourcing. USMCA-qualifying garments enter at 0% — a massive advantage over Asian sources. Mexico's proximity also means shorter lead times (days vs. weeks), lower shipping costs, and easier quality control. Brands like Levi's and Nike have expanded Mexican production. However, Mexico's garment industry has capacity constraints, higher labor costs than Asia, and limited supply of certain specialty fabrics. For basic and mid-range apparel, Mexico is increasingly competitive; for highly specialized or volume-sensitive products, Asia may still be necessary.
Sourcing Strategy for 2026
For clothing importers, sourcing economics shifted dramatically post-SCOTUS. With a 10% base reciprocal tariff now applying to most sources, the tariff arbitrage that drove 2025 sourcing decisions has largely disappeared — Bangladesh, Vietnam, and Cambodia are no longer penalized the way they were under IEEPA. Mexico (0% USMCA on qualifying garments) remains the standout for tariff-free sourcing. China is in the 12.5% tier and adds Section 301 on specific product lines; Vietnam and Thailand also sit at 12.5%. EU-origin apparel now runs under the deal's 15% ceiling — meaning high-MFN garments (15%+) pay MFN only. The July 24, 2026 Section 122 expiration has now happened: its replacement is the Section 301 forced-labor tariff — 10% standard, 12.5% for a 46-economy list including China, Vietnam, and Thailand — so maintaining diversified, flexible sourcing remains prudent.
HTS Classification Tips for Clothing
Accurate HTS classification is critical for clothing imports because rates vary significantly by fabric composition, construction method, and garment type. Knit garments (Chapter 61) and woven garments (Chapter 62) have different rate schedules. Cotton garments, synthetic fiber garments, and silk garments each carry distinct MFN rates ranging from 6% to over 30%. Misclassification can result in overpayment or underpayment with penalties. Key factors CBP examines include fiber content by weight, knit vs. woven construction, whether the garment is for men/women/children, and specific garment type (shirts, trousers, coats, etc.). Working with a customs broker who specializes in textiles is strongly recommended for high-volume apparel importers. Consider requesting a binding ruling from CBP if you regularly import the same garment type.
Post-SCOTUS Impact on the Apparel Supply Chain
The Supreme Court ruling on February 20, 2026 fundamentally reshaped apparel sourcing economics. Vietnam's drop from 46% to 10% made it competitive again almost overnight — orders that had been redirected to Mexico and Central America are now being reconsidered. Bangladesh's reduction from 37% to 10% similarly restored its position as the go-to source for basic garments and fast fashion. The near-uniform 10% base reciprocal tariff eliminated the tariff-driven distortions that had reshuffled global apparel supply chains over the previous year. When Section 122 expired in July 2026 it was replaced by the Section 301 forced-labor tariff (10% standard, 12.5% for a 46-economy list including China, Vietnam, and Thailand), so some planning uncertainty remains. Brands are hedging by maintaining dual sourcing from both Asian and Western Hemisphere factories. The de minimis elimination for China continues to impact Shein, Temu, and other direct-to-consumer platforms that relied on the $800 threshold.
Key Takeaway
Current 2026 clothing tariffs are a flat 10% base reciprocal tariff for most sources (Mexico 0% USMCA-qualifying; China, Vietnam, and Thailand in the 12.5% tier, with China also adding Section 301) — a dramatic drop from the IEEPA-era rates of 37–49% on Bangladesh, Vietnam, and Cambodia, which are now refundable for imports made April 2025–February 2026. With sourcing tariffs largely equalized, labor cost, lead time, and whether a country sits in the 10% standard or 12.5% forced-labor tier are the variables that matter most.
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