Textiles Take the Long Route: Tariffs Spark Global Loophole Hunt

 By Madhulika Pathak 


“Made in Asia” textiles are taking global detours.

To skirt steep tariffs imposed by US President Donald Trump, some fabric and clothing are being rerouted across multiple borders through legal loopholes and backdoors to keep costs down, vendors say, as local manufacturers and small businesses scramble to keep up with soaring costs and supply chain chaos. 


“People are having second thoughts about purchasing new clothing these days. They worry about buying food, not clothes,” a longtime business owner of a small ethnic boutique in downtown Brooklyn said, who asked to not be named because of the subject matter.

Enter transshipping, or rerouting shipments via third countries, to  fulfil orders. The practice comes with the possibility of steep penalties if caught, yet business owners say it is a risk they’re willing to take to avoid offloading heavy duties onto loyal customers.

US President Donald Trump unveiled sweeping tariffs on scores of countries this year, saying the move is aimed at protect domestic manufacturing. But the import tariffs, which are paid by US businesses and consumers on the goods arrival, can disrupt sourcing strategies, and threaten higher prices for consumers.


As tariffs on textile imports from countries like China and India reach up to 50%, owners of hyperlocal businesses in the US are turning to transshipment to keep prices stable for customers in the US.

US imports of textile and apparel from India rose 13% year-over-year between January and May 2025, to over $4.59 billion. However, rising tariffs threaten Asian imports, which account for 75% of the market share, as exporters face increased pressure to remain competitive. 


“History shows tariffs often spark retaliation,” factoring Specialist Chris Lehnes said in a report written in April 2025. “When the U.S. targeted Chinese textiles, Beijing responded with tariffs on American cotton—hurting farmers and disrupting supply chains.” 


Businesses are choosing to import goods from “friendlier” sourcing regions causing complex supply chain reshuffling.


Some Indian textile exporters are reportedly rerouting regular US shipments through neighboring Pakistan, which faces lower duties. With US-India postal services remaining unreliable, businesses are now offering to source specific products and brands through unofficial channels to bypass tariffs.

"It's easier for customers these days to get items shipped to our home country from India, rather than paying import duties,” a Pakistani tailoring shop owner said.  


While countries like Bangladesh, Cambodia, Indonesia, and Vietnam have negotiated trade deals recently, keeping tariffs near 20% on most goods, a 40% penalty on transshipment continues to hang over suppliers and business owners.


US Secretary of the Treasury Scott Bessant indicated that New Delhi and Washington are progressing in talks to bring down tariffs on Indian goods to 15-20%.






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