Tariff Shifts Reshape Global Textile Trade Outlook
By: Seshadri Ramkumar, Professor, Texas Tech University
Published: May 14, 2025 | Lubbock, USA
The recent trade agreement between the United States and China has generated a ripple of optimism in global financial markets, but uncertainty still looms—especially for the textile industry.
With new tariff structures in place, China emerges as a potential loser in the reshaped textile trade landscape. In contrast, countries like India, Bangladesh, and Vietnam stand to gain, as their products become more competitively priced in the U.S. market.
Chinese textiles and apparel now face up to 50% in combined tariffs, rendering them less attractive in global markets. Simultaneously, China’s reduced competitiveness may lead to a drop in U.S. cotton imports, prompting American producers to look for new markets.
“The U.S. cotton industry must explore alternative markets. India might offer new opportunities,” said Keith Lucas, VP of Marketing at Plains Cotton Cooperative Association.
India, aiming to double its textile and apparel exports from $44 billion to $100 billion by 2030, could be a key partner. Its strengths in cotton apparel and home textiles, along with ongoing efforts to reduce its 11% cotton import duty, make it an appealing market for U.S. cotton exporters.
A proposed U.S.-India trade deal is expected to further open opportunities, especially in agriculture. Meanwhile, India already benefits from zero-tariff access to the UK, boosting its global trade prospects.
During a recent lecture for the North India Section of The Textile Institute, I discussed the reality of tariff expectations. While a zero-tariff regime with China is unlikely, a 30–60% tariff range is more realistic under the current agreement. This scenario would continue to favor India and other Asian exporters.
China’s cotton import duties remain complex and layered, depending on licenses and manufacturing categories, with rates varying from 0% to 40%. As a result, Chinese input costs will rise, further weakening its textile export advantage.
With shifting tariffs and changing global trade dynamics, India’s textile sector is well-positioned to fill the vacuum left by China in key markets like the U.S. and UK. Meanwhile, the U.S. cotton sector, backed by its strengths in quality and delivery, has reasons to be optimistic about diversifying its global reach.