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Recent tariffs, especially on Asia, could finally push Central America to break out beyond its ~15% share of U.S. apparel imports.
A t-shirt case study: Tariffs are shifting the economics
To test the viability of nearshoring, AlixPartners developed a cost model using a 60/40 cotton/polyester men's t-shirt. The model compares traditional Asia-based sourcing with nearshoring scenarios. We also included scenarios leveraging recycled PET since there is rising availability and demand for such materials, particularly in the Western Hemisphere.
The question is: How should retailers and brands react to this emerging opportunity?
We believe now is the time for retailers and brands to re-assess opportunities to expand nearshoring. This includes:
- Developing a flexible cost model that can be used to assess total landed cost under various tariff and country scenarios.
- Identifying and prioritizing categories where nearshoring could make economic sense under various scenarios.
- Exploring partnerships with existing and new suppliers in the Western Hemisphere who are expanding production capacity and adding capabilities.
- Engaging with players focused on sustainable manufacturing, especially those leveraging recycled materials to produce garments economically and responsibly.
The economics, infrastructure, and consumer sentiment are aligning—and the window to act is open. Read the full report here.
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