Trump Administration Launches New Section 301 Investigation – Will It Disrupt Textile Trade Flow?

On March 11, 2026 (local time), the Trump administration announced a new Section 301 investigation into industrial overcapacity targeting 16 trading partners, including China, the EU, India, Vietnam, Thailand, Cambodia, and Bangladesh. The probe focuses on trade imbalances and manufacturing capacity issues, with new tariffs likely to be imposed on some economies before summer 2026.

 

 

As a core manufacturing sector, the global textile and apparel industry faces rising uncertainty. Key suppliers to the U.S. are all on the list, putting supply chain stability, export costs, and trade efficiency at risk.

 

Key Textile Exporters Are Directly Targeted

 

The 16 named economies include the world's top textile and apparel exporters:

• China has the most complete supply chain and remains a critical supplier to the U.S.
• Vietnam, Cambodia, Thailand, Bangladesh are major production bases for Nike, Lululemon, and other global brands, with more than 35% of key apparel capacity concentrated in the region.

 

Existing U.S. tariffs on some Chinese clothing products already stand at around 42%. New tariffs would further push up export costs, squeeze margins, and likely reduce order volumes.

 

Southeast Asia Faces More Severe Short-Term Impact

 

Southeast Asian textile industries rely heavily on U.S. exports and have limited local supply-chain support. Most operate on thin margins as OEM/ODM manufacturers.

 

Previous tariff pressure already caused order declines and capacity contraction. A new round of tariffs would:

• Eliminate price competitiveness in the U.S. market
• Risk factory slowdowns or layoffs for small and medium exporters
• Weaken regional industrial and employment stability

 

 

Global Textile Supply Chains Face Delays and Inefficiency

 

The wide-ranging investigation has increased market uncertainty and slowed trade flows:

• U.S. apparel and footwear manufacturing only covers 2.5% of clothing and 1% of shoes; the market is highly dependent on imports.
• Constant tariff shifts make long-term planning difficult for U.S. buyers.
• Shifting supply chains takes time; in the short term, order execution, shipping, and customs clearance will face delays.

 

Trade efficiency across the entire textile chain is expected to decline.

 

Industry Response: Accelerate Upgrading and Diversification

 

The new Section 301 investigation has become a major uncertainty for the global textile industry in 2026.

 

Enterprises are suggested to:

• Track the latest investigation progress and tariff policies closely
• Optimize supply chain planning to improve flexibility and cost control
• Diversify market layout and reduce over-reliance on single markets

 

Proactive adjustment and upgrading will be key to maintaining stable development amid changing trade policies.