Vietnam, Bangladesh and nearshoring: 2026 apparel export data shifts

The first eight months of 2026 have reordered the global apparel sourcing map. Customs data from the European Union, the United States and major exporting nations show Vietnam consolidating its lead, Bangladesh holding second place in the US market despite volume declines, Cambodia posting the fastest growth, and nearshoring hubs capturing investment even as traditional suppliers struggle. The shifts are driven by tariffs that now exceed 30 per cent on Chinese goods entering the US, lead times that favour proximity over cost, and compliance frameworks that reward vertical integration.

For fashion executives managing supply chains worth billions, these are not temporary disruptions. They are the new baseline. The data reveal which countries are gaining orders, which are losing them, and why. This dossier examines the numbers, quantifies the drivers, and lays out what decision makers should do now.

Which countries gained or lost apparel export share in 2026?

Bangladesh's apparel exports to the European Union fell 16.43 per cent year on year to €8.64 billion in the first half of 2026, according to Eurostat data compiled by Bangladesh Apparel Voice. The decline was driven by an 8.22 per cent drop in shipment volumes and an 8.94 per cent fall in average export prices during January to June. Overall, the EU imported €41.10 billion worth of apparel from global suppliers in H1 2026, down 9.70 per cent from a year earlier, yet Bangladesh's contraction was steeper than the market as a whole.

Vietnam was the only major supplier to post positive export growth, with shipments to the EU rising 0.36 per cent in H1 2026. Vietnam's export volumes fell 11.52 per cent, but a 13.43 per cent increase in average unit prices helped offset the decline in shipments; the price increase was the highest among the major suppliers during the period. Turkey's exports fell 14.60 per cent, followed by Pakistan at 12.53 per cent, India at 12.49 per cent, Sri Lanka at 11.21 per cent, China at 8.88 per cent and Cambodia at 8.84 per cent to the EU in the same period.

In the United States, the picture differed. Bangladesh has moved ahead of China to become the second-largest apparel exporter to the United States, even as its own export earnings to the market declined in early 2026. Bangladesh exported garments worth $1.37 billion to the US in January to February 2026, marking an 8.53 per cent drop from $1.5 billion during the same period a year earlier. Vietnam retained its position as the top apparel exporter to the US, recording $2.7 billion in shipments over the same period, a modest year-on-year increase of 2.88 per cent.

Chinese shipment of apparels to the US fell higher at a significant 34.20 per cent to $4.55 billion, placing Bangladesh $110 million ahead and in second position, according to the Office of Textiles and Apparel for the January to July 2026 period. Vietnam and Cambodia recorded growth of 2.86 per cent and 18.43 per cent respectively during the first two months of the year.

Cambodia stands out. Cambodia exported nearly $7 billion of garments and clothing accessories during January to July 2026, an increase of almost 8 per cent year on year, according to the General Department of Customs and Excise. US apparel imports fell 7.7 per cent year on year to $35.08 billion during January to June 2026, yet shipments from Cambodia increased 12.6 per cent to $2.13 billion, the strongest percentage growth among major Asian suppliers. Apparel and textile exports reached $8.78 billion during the January to August period this year, up 7.3 per cent compared to the same period last year.

Why did Bangladesh lose ground in the EU but hold share in the US?

The divergence reflects tariff structures and compliance pressures. Bangladesh benefits from duty-free access to the EU under the Everything But Arms scheme, yet that advantage did not prevent the 16.4 per cent export decline in H1 2026. Weak consumer demand across Europe and price deflation were the immediate causes. The figures indicate that Bangladesh's export decline was deeper than the overall contraction in the EU apparel market, with both shipment volumes and prices falling significantly during the first six months of the year.

In the US, Bangladesh pays most-favoured-nation tariffs that range from 12 to 19 per cent on most apparel categories, but China now faces combined duties exceeding 30 per cent. Chinese-origin cotton knitwear under HTS 6109.10 lands at a 50.5 per cent combined US duty in 2026 (16.5 per cent MFN plus 34 per cent Section 301), while Mexican apparel meeting USMCA yarn-forward enters at 0 per cent. That gap handed Bangladesh second place by default as US buyers shifted away from Chinese suppliers, even though Bangladesh's own shipment volumes declined.

Vietnam's resilience in both markets stems from trade agreements and product mix. Vietnam has duty-free access to the EU under the EVFTA and benefits from lower Section 301 tariffs to the US than China. The 13.43 per cent price increase Vietnam achieved in the EU during H1 2026 suggests a shift toward higher-value products or improved negotiating power with buyers, offsetting the volume decline.

What is driving nearshoring momentum in Mexico and Central America?

Mexico drew a record US$23.6 billion in FDI in the first quarter alone, the highest first quarter on record and a 10.4 per cent rise year over year, with reinvested earnings making up the bulk of the figure. Mexico closed 2025 with a record US$40.9 billion in foreign direct investment, up 10.8 per cent over 2024 and the fifth consecutive record year. Nearshoring is estimated at close to 58 per cent of the total.

The USMCA yarn-forward rule is the mechanism. Almost 94 per cent of those exports claimed duty-free benefits under the USMCA in the first three months of 2026, a significant jump from around 80 to 83 per cent in the past, according to the U.S. International Trade Commission. USMCA yarn-forward qualification eliminates the 16.5 per cent MFN duty on knit tops, saving roughly $5,000 to $6,200 per 5,000-unit shipment, and Mexico delivers production plus freight in 4 to 8 weeks versus 10 to 16 weeks from Asia, letting brands reorder hero SKUs 12 times a year instead of 3.

Lead times matter as much as tariffs. Asia runs 12 to 17 weeks door to door, with peak-season variance pushing some programs to 20 weeks. Lead times run 4 to 8 weeks for production plus 2 to 7 days cross-border, against 14 to 18 weeks from Vietnam or Bangladesh for Mexico. For fashion categories where reorders drive profitability, that gap is decisive.

The USMCA review scheduled for mid-2026 introduces policy risk. USTR Jamieson Greer and Mexican Secretary of Economy Marcelo Ebrard launched formal review talks in March, with the first technical round scheduled for July 1; the review is widely expected to function as a renegotiation, with Washington pushing for tighter rules of origin and further reductions in non-North American content, especially from China. At the same time, Mexico's textile-input base is becoming more Asia-linked, with China nearly matching the US as a supplier of textiles into Mexico; the risk is whether Mexico can keep its USMCA advantage if the yarn, fabric and intermediate inputs behind that speed increasingly come from outside North America.

How are Morocco, Tunisia and Turkey performing as EU nearshoring hubs?

North Africa presents a mixed picture. Morocco's Foreign Exchange Office shows that textile and leather exports fell by 6.5 per cent year on year, representing a decline of 1.461 billion Moroccan dirhams; the sector's total exports consequently dropped to 21.069 billion dirhams in H1 2026. The contraction came despite a 9.7 per cent increase in Morocco's overall exports during the same period, highlighting the widening performance gap between textiles and the country's faster-growing industrial sectors.

Yet Morocco maintained pricing power. In the first five months of 2026, Morocco in its exports of apparels to the European Union recorded one of the highest average unit prices amongst EU leading clothing suppliers; Morocco was in second position on unit price, trailing Tunisia but ahead of Vietnam, according to the Istanbul Apparel Exporters' Association. The average price per kilogram of Morocco textile exports to the EU reached €25.90 during the first five months of 2026, up from €24.40 per kilogram in 2025 and €25.10 the year before.

Morocco's apparel shipments to the European Union slipped between January and May 2026, with import value falling 9 per cent year on year to €1.05 billion; EU imports from the North African country reached 40,693 tonnes between January and May 2026, down 18.6 per cent from 49,964 tonnes a year prior. The data suggest Morocco is shifting toward smaller volumes of higher-value garments, consistent with brands seeking shorter lead times and premium quality rather than mass-market basics.

Tunisia and Egypt are capturing share Morocco is losing. Morocco's textile and leather exports fell 5.5 per cent through July 2026, while merchandise exports rose 8.4 per cent; TexPro shows its EU27 HS 61-62 apparel exports were almost flat in January to April, as Tunisia grew 4.7 per cent and Egypt 32.7 per cent. The Egyptian surge reflects new capacity and aggressive pricing, whilst Tunisia benefits from proximity and established relationships with European fast-fashion buyers.

Turkey's textile exports remain significant but apparel shipments declined. According to data from the Istanbul Textile and Raw Materials Exporters' Association, the Turkish textile industry's exports amounted to USD 5.6 billion in the January to June 2026 period, marking a 1 per cent decline compared to the same period of the previous year. Apparel and garment exports also decreased by 1 per cent, amounting to USD 6.9 billion. However, exports to the United States climbed 18.2 per cent to $452 million during January to September 2026, indicating Turkish suppliers are diversifying away from the EU.

What compliance and lead-time advantages matter most to buyers?

Compliance with rules of origin determines duty treatment, and the details are complex. Textiles and apparel follow the yarn-forward rule, one of the stricter origin requirements in the agreement; to qualify for duty-free treatment, the yarn used to produce the fabric (and ultimately the garment) must be formed in a USMCA country; fabric weaving, cutting, and sewing must also occur within the region. In practical terms, if a factory in Mexico sews a cotton shirt using fabric woven from Chinese yarn, the shirt does not qualify.

The yarn-forward rule creates a barrier to entry but rewards suppliers who meet it. Proving origin under the yarn-forward rule requires meticulous documentation: mill certificates, yarn invoices, fabric mill declarations, and a NAFTA/USMCA certificate of origin. CBP has significantly increased its scrutiny of USMCA origin claims since 2022, driven by concerns about companies routing Chinese-origin goods through Mexico to avoid Section 301 tariffs.

Lead times define reorder capacity. Brand replenishment requirements have shifted from 12 to 16 week lead times pre-pandemic to 4 to 6 weeks in 2025, with the most demanding buyers targeting a four-week ceiling from order placement to shipment. Asia cannot meet that target. Lead time advantage of 3 to 4 weeks versus 10 to 16 from Asia for North America; lead time advantage of 4 to 6 weeks for EU buyers versus 10 to 14 from South Asia for nearshoring regions.

Freight and working capital compound the advantage. A 14-week lead time requires buyers to commit deposits months before goods arrive, tying up cash and increasing inventory risk. A 5-week lead time from Mexico allows brands to read sell-through data, adjust orders mid-season, and reduce markdowns. Across our 2024 to 2025 transitions, the median brand cut markdown depth by 8 to 12 per cent on switched SKUs because they could read sell-through and reorder inside the season, according to OneAim Apparel sourcing records.

Which company moved production and what happened?

Hansae Co. Ltd., a South Korean apparel manufacturer with partnerships with more than 30 US buyers and retailers, is making a large-scale investment in Guatemala to meet nearshoring demand. Throughout its 40 years of history and expertise in apparel manufacturing, global fashion vendor Hansae Co. Ltd. has continuously grown and been recognised in its field; with partnerships with more than 30 buyers and retailers in the U.S., the company exports about 400 million pieces per year; Hansae is gaining attention because it is making a large-scale investment in Guatemala to meet these buyers' nearshoring needs.

The company's decision reflects the structural shift in US sourcing. Guatemala benefits from CAFTA-DR duty-free access and shorter lead times to the US market, though it lacks the yarn and fabric infrastructure of Mexico. Hansae's scale, 400 million pieces annually, positions it to supply high-volume programmes for major retailers. The investment signals that Korean manufacturers, historically reliant on Asian production, now view Central America as essential to retaining US business.

Decathlon, the French sporting goods retailer, reversed its trend of relying on Asian suppliers by returning to Moroccan and Tunisian manufacturers. Decathlon recently reversed its trend of relying on Asian suppliers, returning to Moroccan and Tunisian manufacturers to meet environmental and logistical demands. The move aligns with European sustainability regulations, including the Corporate Sustainability Reporting Directive and Digital Product Passport, which favour shorter supply chains and traceable sourcing.

Asos, the UK online fashion retailer, increased sourcing from Turkey and Morocco for trend-led, seasonal lines. Asos has increased sourcing from Turkey and Morocco, particularly for their trend-led, seasonal lines. Fast fashion depends on speed to market, and Turkey's 4 to 6 week lead times to the EU allow Asos to respond to consumer trends within a season, reducing unsold inventory.

What risks and limits constrain nearshoring strategies?

Capacity is finite. Mexico and Central America cannot absorb the volume currently sourced from Asia. Factory floor labour rates are typically higher in nearshoring regions compared to traditional offshore sites. A t-shirt that costs $3.91 CMT in China costs $4.62 in Mexico for matched specifications, an 18 per cent premium. For low-margin basics, that gap matters.

The yarn-forward rule limits fabric choice. Fabric sourced from China, India, or Turkey no longer qualifies, even if the garment is cut and sewn in Mexico; zippers, buttons, and thread also fall under stricter rules, though there is a small de minimis allowance (up to 10 per cent of the total weight of non-originating fibres); the result is a garment that used to qualify with a simple assembly operation in Mexico now requires a fully integrated supply chain, from spinning to weaving to final assembly, all within the USMCA region. Brands accustomed to sourcing fabrics globally find the constraint restrictive.

Policy uncertainty remains. The USMCA review outcome is not yet known; investment announcements in Mexico dropped 75 per cent in the first eight months of 2024 versus 2023, largely on policy uncertainty; momentum recovered in 2025 and 2026, but this is a reminder that the cycle can cool. Tariff rates change, trade agreements are renegotiated, and brands that commit to long-term capacity in one region face stranded costs if policy shifts.

Bangladesh retains advantages that nearshoring cannot match. Bangladesh has the largest garment workforce, around 4 to 5 million workers and 4,500-plus factories, and over $47 billion in exports. No nearshoring hub offers that scale. For volume programmes where cost per unit is decisive and lead times are manageable, Bangladesh remains competitive despite recent declines.

FAQ

What should fashion companies do now?

1. Map landed cost by destination Calculate total duty, freight, and working capital for each origin and destination pair, not just FOB price. A product that appears 15% cheaper ex-factory may cost more landed once tariffs, longer lead times, and inventory carrying costs are included.
2. Qualify two backup suppliers per category Pre-approve factories in at least two regions for each major product category, with samples and pricing agreed. Tariff changes and capacity constraints move faster than new supplier onboarding; brands that wait to diversify until a disruption occurs lose 6 to 12 months.
3. Document USMCA compliance before the first shipment Collect mill certificates, yarn affidavits, and fabric origin documentation at the development stage, not at customs audit. CBP has increased scrutiny since 2022, and missing documentation triggers duty assessments plus penalties that erase the USMCA savings.
4. Model lead-time impact on markdown rates Quantify how a 9-week reduction in lead time affects your ability to reorder bestsellers and reduce end-of-season markdowns. For trend-driven categories, nearshoring may improve gross margin even if CMT is higher, because you sell more at full price.
5. Lock long-term capacity in nearshoring hubs now Mexico, Guatemala, and Turkey are adding capacity, but not fast enough. Brands that commit volume and deposits in 2026 secure production slots; those who wait may find no capacity available in 2027 when tariffs or regulations force a shift.
6. Track policy timelines for USMCA, EBA graduation, and CSRD Bangladesh loses EBA duty-free access to the EU after graduation from least-developed-country status, scheduled for late 2026 review. The USMCA review conclusions in mid-2026 may tighten rules of origin further. EU CSRD and Digital Product Passport compliance deadlines apply to large companies from 2027. Build these dates into sourcing contracts.
7. Test pilot programmes with recycled and regional fibre Recycled polyester and cotton grown in USMCA or EU regions qualify under rules of origin and increasingly meet retailer sustainability mandates. Pilot small runs to prove quality, cost, and supply reliability before scaling, as input availability remains constrained.