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Unpredictability was the theme for fashion’s supply chains in 2025, and the coming year looks to deliver much of the same turbulence. The key drivers of last year’s supply chain shocks for apparel sourcing teams — climate crisis events like floods and droughts, President Trump’s unpredictable tariffs, and a suite of looming laws — are likely to continue reshaping the industry’s sourcing map down to the raw material level.
Apparel experts are approaching the new year with cautious optimism, encouraging fashion businesses to focus on building resilience by shifting from short-term reactions to long-term preparation and relationship-building. This will require companies to look at sustainability as a core business strategy rather than a fair-weather focus.
“With the current state of the world, a prudent approach is to expect the unexpectable,” says Ranjan Mahtani, founder and chairman of Epic Group, a Hong Kong-based manufacturer with facilities in Bangladesh, India, Ethiopia, Jordan and Sri Lanka.
Full tariff impacts are only just emerging
Sweeping tariffs imposed by the Trump administration were the big story of the last year, impacting dozens of countries, including key apparel sourcing regions like India, China, Pakistan and Vietnam. Some 95% of executives surveyed by supply chain management platform Inspectorio for its State of Supply Chain 2025 report said tariffs were the biggest disruptor of 2025, leading to increased supply chain diversification, production relocation to lower-risk regions, and renegotiation of agreements with existing suppliers.
“In 2025, tariffs functioned less like a static tax and more like a strategic variable that reshaped ordering patterns, inventory decisions, supplier allocation, and nearshoring conversations because the risk of change became as important as the rate itself,” says Mark Burstein, senior vice president for the Americas at Inspectorio, who also sits on the board of directors for the American Apparel and Footwear Association. “In 2026, even if specific rates shift, tariff-driven sourcing strategy will likely remain a core agenda item.”
Historically, sourcing decisions have been financially driven as brands sought the most cost-effective producers to maintain margins on apparel production. Now, reliability is the key priority. “Countries such as Indonesia and Vietnam, where tariffs have remained relatively stable since April 2025, are seen as safer sourcing options,” says Bernhard Riegler, vice president of marketing for Sappi, a leading wood pulp producer in the man-made cellulosic fiber supply chain. “Stability, more than cost, is becoming the decisive factor.”
Reigler believes the industry is only just beginning to feel the effects of 2025’s “seesaw of tariff changes”, with increasing geopolitical tensions likely to exacerbate this instability in 2026. “Markets adjust to certainty, but they struggle when ultimate landed costs change from month to month,” he says. “This uncertainty impacts the entire value chain, from retailers who are unwilling to provide early commitments for garment purchases, to garment makers, fabric producers, spinners, and fiber suppliers who are unsure what to make, when to make it, or how much seasonal stock to carry to ensure security of supply.”
Climate chaos and the decline of worker rights
The World Meteorological Organization’s State of Climate Update, published ahead of COP30, named 2025 one of the hottest years on record. Extreme weather events hit fashion’s producing regions hard, from the worst flooding in 30 years that decimated cotton crops in India and Pakistan to air pollution and extreme heat making garment factories increasingly dangerous for workers.
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