Fashion supply chains brace for sustained disruption in 2026 amidst tariffs and climate shocks

As 2026 unfolds, the fashion industry continues to grapple with unpredictable climate events, rising tariffs, and regulatory pressures, prompting a strategic shift towards diversification, digitalisation, and sustainability to ensure resilience.

Unpredictability that rattled fashion’s supply chains in 2025 shows little sign of abating as the industry moves into 2026. Climate shocks, shifting trade policy and an increasingly complex regulatory environment are continuin...

g to force apparel sourcing teams to rethink where and how they make garments, with implications that reach from raw fibres to retail price tags.

According to Vogue, floods, droughts and other climate events combined with sweeping tariffs introduced last year to produce a year of frequent, expensive disruptions. “With the current state of the world, a prudent approach is to expect the unexpectable,” Ranjan Mahtani, founder and chairman of Epic Group, told Vogue; Mahtani’s firm operates manufacturing facilities across Bangladesh, India, Ethiopia, Jordan and Sri Lanka. The magazine’s reporting notes that many of the same drivers that upended sourcing in 2025 are likely to remain central in 2026.

Tariffs have emerged as the single biggest shock. Inspectorio’s State of Supply Chain 2025 report found that 95% of executives surveyed said tariffs were the largest disruptor in 2025, reshaping ordering patterns, inventory strategy and supplier allocation. “In 2025, tariffs functioned less like a static tax and more like a strategic variable that reshaped ordering patterns, inventory decisions, supplier allocation, and nearshoring conversations because the risk of change became as important as the rate itself,” Mark Burstein, senior vice president for the Americas at Inspectorio, told Vogue. Industry reporting since then has repeatedly underlined that the full consequences of last year’s measures are still rippling through the sector.

Those ripples are visible in pricing and production. The Business of Fashion reported that volatility linked to tariffs has hit factory utilisation and raised sourcing costs, squeezing margins and forcing suppliers to rethink footprints. FashionUnited’s outlook for 2026 urges brands to invest in visibility, AI-driven planning and a “connected digital backbone” so they can respond faster to shocks; the publication highlights nearshoring and multi-sourcing as core resilience strategies. Coverage of seasonal planning noted that tariffs complicated the roll-out of Fall/Winter collections in 2025, with brands pressing ahead with price increases and some vendors in affected countries seeing slower order volumes and delayed shipments.

The trade measures are also changing product design and the economics of sustainability. FashionSizzle reports that brands have redesigned items to avoid higher duties and that upcycled garments have become comparatively more cost-competitive because they often attract lower import duties. At the same time, a survey filed with the U.S. Trade Representative and posted on Regulations.gov found that U.S. fashion companies expect continued tariff pressures; respondents reported that nearly 70% had delayed or cancelled sourcing orders because of tariff hikes and around 40% had reduced investments in areas including sustainability and product innovation.

That tension, between cost pressures that can shrink sustainability budgets and the long-term need to address environmental and social risks, runs through much recent commentary. Vogue’s reporting and a separate piece on sustainability concluded that the industry must treat sustainability as core strategy rather than a discretionary or “fair-weather” choice if it is to build genuinely resilient supply chains that protect workers and raw-material sources.

Practical responses are taking shape. Apparel suppliers and brands are diversifying sourcing across regions and deepening relationships with key partners, moves the Business of Fashion said are designed to maximise stability as production costs rise. FashionUnited and other analysts urge investment in automation and robotics to improve operational precision, alongside better data-sharing and integration so planning can be more anticipatory than reactive. For many companies, those investments also serve a dual purpose: raising speed and agility while providing the traceability increasingly demanded by regulators and consumers.

Yet investment choices are being made amid competing short-term pressures. The Regulations.gov survey highlighted that some companies have cut back on sustainability or innovation spend to cope with tariff-driven cost increases, a dynamic echoed in industry reporting that warns of a potential trade-off between immediate competitiveness and long-term risk reduction.

The picture for 2026, therefore, is one of cautious pragmatism. Industry voices in these reports and articles converge on a common prescription: build longer-term supplier relationships, diversify sourcing to spread risk, accelerate digital visibility and make sustainability an operational priority rather than an add-on. As one industry observer put it in recent reporting, tariff-driven strategy has joined issues such as climate risk and regulation at the heart of sourcing decisions, and even if specific rates shift, the strategic recalibration is likely to remain an enduring feature of fashion’s global supply chains.

Source: Noah Wire Services