SupplyChainBrain reports that trade tensions between the U.S. and China continue to intensify—and American retailers are working to reduce their dependence on Chinese manufacturing. During an earnings call on May 21, Target Chief Commercial Officer Rick Gomez said the company has reduced the share of products sourced from China from 60% in 2017 to 30% today, with plans to further lower that total to 25% by the end of 2026. Gap CEO Richard Dickson outlined similar plans during an earnings call on May 29—China was once among the retailer's top sourcing countries—but expects the company's products sourced there to account for less than 3% by the end of 2025. Macy's CEO Tony Spring also stated during an earnings call on May 28 that an estimated 18% of products from national brands, which represent the majority of the retailer's sales, are sourced from China—down from 20% at the end of the previous fiscal year. Across all three retailers, a common driver of the shift in sourcing strategies has been tariffs—with most concerns centered around China. And President Trump frequently hesitates to implement his most aggressive tariff plans.
From a supply chain perspective, Target Corporation, based in Minneapolis, Minnesota, U.S., with CEO Brian Cornell and Chief Commercial Officer Rick Gomez, generated 2024 annual revenue of $107 billion, operates 1,978 stores, and is a leading mass retailer in the U.S. Gap Inc., based in San Francisco, California, U.S., with CEO Richard Dickson (formerly of Mattel), has primary brands including Old Navy, Banana Republic, and Athleta, with 2024 revenue of $15 billion. Macy's Inc., based in New York, NY, with CEO Tony Spring, has primary brands including Macy's, Bloomingdale's, and Bluemercury, generated 2024 revenue of $23 billion, and is a leading department store operator. Walmart, based in Bentonville, Arkansas, U.S., with CEO Doug McMillon, generated 2024 revenue of $681 billion and is the world's largest retailer. All four companies are evaluating Vietnam, India, Bangladesh, Indonesia, Cambodia, Mexico, Honduras, Guatemala, Pakistan, and Türkiye as primary nearshoring and friendshoring target countries.
From a supply chain perspective, U.S. textile and apparel import data from the Office of Textiles and Apparel (OTEXA; U.S. Department of Commerce) shows that imports from China fell to 22% in 2024—down from 40% in 2010—while Vietnam rose to 18%, Bangladesh accounts for 9%, India 8%, Indonesia 5%, and Mexico 4%. The U.S. Customs and Border Protection (CBP) automatically detains cotton, tomatoes, polysilicon, and other products originating from Xinjiang under the Uyghur Forced Labor Prevention Act (UFLPA)—requiring retailers to completely sever supply chain ties to Xinjiang. The U.S. Trade Representative (USTR; Jamieson Greer) continues to maintain Section 301 tariffs on China. The Generalized System of Preferences (GSP), Caribbean Basin Initiative (CBI), African Growth and Opportunity Act (AGOA), and USMCA are primary trade preference programs—offering retailers alternative sourcing options.
From a supply chain perspective, nearshoring and friendshoring strategies focus on: (1) maquiladora and free trade zones in Mexico and Honduras; (2) industrial parks in Bac Ninh and Hai Phong in Vietnam; (3) textile clusters in Tamil Nadu in India; (4) apparel clusters in Dhaka in Bangladesh; (5) industrial hubs in Java in Indonesia; (6) apparel centers in Phnom Penh in Cambodia; (7) textile production in Pakistan; (8) export centers in Bursa, Istanbul, and Izmir in Türkiye; (9) apparel production in Guatemala and El Salvador; and (10) textile investments in Egypt. Establishing new manufacturing facilities typically takes 18–24 months, with full scaling requiring 36–48 months—providing limited short-term flexibility for retailers responding urgently to tariff changes. As a result, the aggressive China reduction plans announced by Target, Gap, and Macy's appear to signal a restructuring of the global textile, apparel, and consumer products supply chain—with supply chain managers making source diversification and nearshoring primary strategic priorities.
Key Takeaways:
1. Target (Rick Gomez) has reduced China share from 60% in 2017 to 30% today; 2026 year-end target is 25%.
2. Gap (Richard Dickson) plans to reduce China share to below 3% by end of 2025.
3. Macy's (Tony Spring) has reduced national brand China share to 18%—down from 20%.
4. Trump tariffs serve as a common driving factor.
5. Vietnam, India, and Bangladesh are primary alternative sourcing countries.
