Uncertainty surrounding the US-Mexico-Canada Agreement has complicated efforts by US fashion companies to shift apparel production away from China toward Mexico. The pact's first mandatory review this month left the deal in force but triggered annual negotiations. Industry leaders now question the stability of regional supply chains.
The United States declined to reaffirm the USMCA in its current form during the review. President Donald Trump had criticized shortcomings in the agreement he originally brokered, along with trade imbalances involving Canada and Mexico. The three nations are now engaged in ongoing talks, with the US and Mexico set to hold a third round this week.
A recent survey found that only 31.6 percent of leading US fashion companies sourced apparel from Mexico this year, down from 52.9 percent in 2025. Just 33 percent plan to increase such sourcing over the next two years. Companies continue to value Mexico for speed to market and duty savings, yet policy volatility is limiting new investments.
Steve Lamar of the American Apparel & Footwear Association noted that firms are maintaining ties with China due to a lack of predictable alternatives. Kim Glas of the National Council of Textile Organizations warned that the review process injects uncertainty into an industry already facing plant closures.
Industry groups across the US, Mexico, and Canada have urged negotiators to keep the agreement trilateral and preserve existing rules of origin for textiles and apparel. Smaller brands report particular difficulty navigating the requirements when key fabrics remain unavailable in North America.
