Despite challenges in the courts and in Congress, tariffs remain a core element of President Donald Trump’s administrative approach. The president continues to view tariffs as a primary policy driver, and the administration has touted over $200 billion collected as in fiscal year 2025 (ending September 30).
Led by United States Trade Representative Jamieson Greer, the administration has spent the past year working toward trade agreements with dozens of countries originally hit with significant tariffs under the International Emergency Economic Powers Act. Recent agreements have been announced with Bangladesh, India, Taiwan and others.
Under an agreement announced Feb. 2, the United States will charge India with a reduced reciprocal tariff, lowering the rate from 25% to 18% and lifting a separate 25% tariff imposed on Indian goods as a penalty for that nation’s purchases of Russian oil.
- The agreement brings welcome news for the promotional products industry, which relies upon India as a major hub for product sourcing. Last May, 43% of PPAI 100 suppliers reported they’re using India as a sourcing alternative from China, according to PPAI Research.
U.S. tariffs on goods imported from Bangladesh – a key apparel manufacturing hub – were reduced to 19% in an agreement announced Feb. 9.
Emerging Trade Developments Could Reshape Apparel Sourcing
Most importantly for promo, both the agreements with Bangladesh and India are expected to include provisions for zero-tariff apparel exports to the U.S. if the overseas manufacturers use American cotton.
These developments between the United States and key South Asian partners signal a potential shift in apparel tariff policy, with meaningful implications for the merch industry.
- The framework agreement with Bangladesh may allow certain apparel products to enter at a zero tariff rate, provided they incorporate qualifying United States textile inputs such as cotton or yarn.
- India is currently in active trade discussions with the United States, and draft proposals indicate that a similar conditional zero tariff pathway for apparel may be included in a forthcoming agreement. While still under negotiation, the direction of discussion suggests comparable treatment tied to United States textile inputs.
“Momentum in trade policy that supports both diversified sourcing and United States textile inputs is encouraging for the branded merchandise industry,” says Alok Bhat, market economist and research & public affairs lead for PPAI. “PPAI has consistently engaged policymakers on the importance of predictable trade frameworks that strengthen American inputs while enabling global competitiveness. Seeing that alignment reflected in current discussions is a positive signal for the merch ecosystem.”
It’s important to note that these agreements do not provide a blanket removal of tariffs, and any zero-tariff access for apparel products would be conditional and tied to rules of origin requirements designed to reinforce United States textile exports. But apparel remains one of the most popular product categories in promo, and these developments are significant for the industry.
“Balanced trade approaches that connect cotton growers, manufacturers, decorators and distributors create a stronger foundation for long-term industry growth,” adds Bhat.
Alok Bhat
PPAI Market Economist and Research & Public Affairs Lead
Potential Trade Detours
These and other trade agreements provide much-desired stability for American businesses, but the legislative and judicial branches of the federal government may complicate matters:
- The Supreme Court is set to issue a ruling any day now that could undo the administration’s tariff regime and thereby introduce a whole round of uncertainty, with questions about possible refunds and what other tariff-related mechanisms the president will use.
- The Senate voted to roll back global tariffs at least three times last year, and last week the House passed a resolution to repeal the tariffs on Canadian goods.
In another wrinkle, The U.S.-Canada-Mexico Agreement is currently under review as specified in its “sunset clause.” The Office of the U.S. Trade Representative announced a public consultation process in advance of the joint review scheduled to begin July 1, 2026.
Promo leaders have urged stability and renewal of USMCA with minimal changes, but Trump has recently called the deal – brokered and signed during his first term – “irrelevant” and reportedly has asked aides why he shouldn’t withdraw from the agreement.
View or download PPAI’s tariff tracker document below (updated Feb. 16), for the latest rates and information about recent developments:
Please contact Rachel Zoch, CAS, PPAI’s public affairs manager, at rachelz@ppai.org if you have any questions about regulatory issues or government affairs.
