Although Trump defends the tariffs as necessary for national security, critics argue that the policy will increase consumer prices, disrupt supply chains, and place additional strain on American businesses and consumers.
Apparel export trend of Canada
The US has imposed a 25 per cent tariff on Canadian apparel, impacting exports of wool suits, jackets, and outerwear.
Canada holds a niche in premium wool garments but faces growing competition from Vietnam, Bangladesh, and China.
Italy, India, and China stand to gain from Canada’s reduced US market share.
The shift in trade policies may reshape sourcing strategies and global apparel trade.
The United States has witnessed a decline in apparel and home textile imports from Canada in 2024 compared to 2023. Despite this, overall US imports of apparel and home textiles have increased, reaching $77.07 billion during January–November 2024, up from $75.87 billion in the same period of 2023—marking a 2 per cent growth. This trend suggests that the US is increasingly diversifying its sourcing strategy, shifting away from regional partners like Canada in favour of countries such as Vietnam and Bangladesh. The growing prominence of these Asian suppliers indicates their competitive edge in pricing, manufacturing capabilities, and trade agreements that offer more favourable terms.
Impact of US tariff increase on Canada’s apparel exports: An analysis of affected 6-digit products
In Canada, Chapters 61 and 62, which encompass knitted or crocheted apparel (HS 61) and woven apparel (HS 62), together account for over 41 per cent of the country’s textile-related exports. Of these two categories, HS 62—woven apparel—emerges as the dominant contributor to Canada’s textile exports.
Apparel under HS 62: Woven garments
1. HS 62 represents a larger portion of Canada’s textile export value, driven by men’s and women’s wool suits, wool trousers, and jackets, with a strong emphasis on high-quality, luxury garments.
2. Canada’s premium wool-based apparel remains competitive in the US market, where wool suits and blazers are popular. These products cater to the upper-middle to high-end consumer segment.
3. Canada’s apparel manufacturers in this category benefit from skilled craftsmanship, premium raw materials, and proximity to the US, its largest trading partner.
4. Additionally, the Canada-US-Mexico Agreement (CUSMA) helps ensure tariff-free access to the US market, making Canadian woven garments more attractive to American consumers.
Apparel under HS 61: Knitted garments
1. While HS 61—which includes knitted and crocheted apparel such as sweaters, pullovers, and cardigans—also plays a role in Canada’s textile exports, it holds a smaller share compared to woven apparel (HS 62).
2. The knitted garment sector faces greater competition from low-cost producers in countries such as China, Bangladesh, and Vietnam, which dominate the mass-market knitted apparel segment.
3. Canada’s knitted apparel exports are more limited in volume, and its competitive edge lies in niche markets that value quality and craftsmanship, such as sustainable and eco-friendly textiles.
In Canada’s textile export portfolio, woven apparel (HS 62) is the dominant category, contributing more significantly to the overall share of exports compared to knitted apparel (HS 61). Canada’s ability to produce high-quality wool suits and garments, combined with its strategic location and trade agreements, bolsters the country’s competitiveness in this segment. While knitted apparel remains important, it faces stiffer competition in the global market, limiting its overall impact on Canada’s textile exports.
Strength of Canada in US apparel imports
Canada holds a niche but notable presence in the US apparel market, particularly in premium and specialised garment categories. Its strongest position is in men’s and boys’ wool suits, where it accounts for 20 per cent of total US imports, ranking second after Italy. Canada also has a significant share in men’s wool jackets and blazers (11 per cent), securing the third position in US imports.
In addition to wool-based apparel, Canada maintains a steady presence in outerwear and specialised garments. It ranks fifth in women’s and girls’ overcoats, jackets, and anoraks (4 per cent share) and rubberised or impregnated garments (4 per cent share). However, its share in high-volume segments like jerseys, pullovers, and cardigans is relatively small, with only a 1 per cent market share in man-made fibre versions and less than 1 per cent in cotton-based variants.
While Canada does not compete with major low-cost manufacturing hubs like Vietnam, Bangladesh, or China in mass-market apparel, its strength lies in high-quality, wool-based garments and specialized outerwear. However, with shifting US sourcing preferences and increasing competition from other countries, Canada may need to explore strategies such as leveraging trade agreements, enhancing competitiveness in synthetic and cotton-based apparel, and targeting premium markets to sustain and expand its foothold in US imports.
Key beneficiaries of US tariffs on Canadian apparel
As US tariffs impact Canadian apparel exports, several countries stand to gain market share across different segments:
Italy: Italy is well-positioned to surpass Canada in premium woollen apparel and garment categories, particularly wool suits, jackets, and trousers. However, strained EU-US relations could limit the extent of Italy’s advantage, despite its reputation for high-quality craftsmanship and luxury textiles.
India: India could emerge as a key beneficiary by striking a balance between quality and cost-effectiveness. As tariffs make premium apparel from Canada more expensive, India’s affordable yet high-quality offerings—particularly in wool blends, cotton apparel, and outerwear—could gain traction in the US market.
China: Despite geopolitical tensions, China’s massive economies of scale and dominance in technical textiles will likely solidify its position in industrial and specialised apparel. With an extensive supply chain and cost advantages, China remains a leading contender to absorb Canada’s lost market share, especially in rubberised/impregnated garments and synthetic fibre apparel.
These shifting trade dynamics may reshape the competitive landscape in the US apparel market, with each country capitalising on its respective strengths to fill the gap left by Canadian exports.
Fibre2Fashion News Desk (WE – PN)
