As the U.S. government shutdown stretches into November 2025, its ripple effects are being felt far beyond Washington most acutely in Haiti, where the textile industry is unraveling under the weight of expired trade preferences, factory closures, and natural disaster. For U.S. brands, importers, and sourcing teams, the situation presents a complex mix of risk, opportunity, and strategic decision-making.
Haiti’s Apparel Sector: A Fragile Lifeline
Haiti’s textile and apparel industry has long been a cornerstone of its formal economy, employing over 57,000 workers, many of them women, and generating $538 million in exports to the U.S. annually. The sector thrives under two key trade preference programs HOPE (Haitian Hemispheric Opportunity through Partnership Encouragement) and HELP (Haiti Economic Lift Program) which allow duty-free access to the U.S. for garments made with U.S. yarns and fabrics.
These programs have made Haiti a competitive sourcing hub for basic apparel categories like T-shirts, underwear, uniforms, and athleisure. Brands such as Gildan, Hanes, Fruit of the Loom, Levi’s, and MAS Holdings rely on Haitian factories for high-volume, cost-effective production.
Shutdown Fallout: Trade Preferences Expire
On October 1, 2025, the HOPE and HELP programs expired amid the U.S. government shutdown. With no legislative renewal in sight, Haitian exports now face steep tariffs ranging from 14% to 30%, eroding their price advantage and triggering immediate disruptions:
- Factory closures: S&H Global shuttered a plant and laid off 3,500 workers.
- Order delays: U.S. importers are pausing or canceling shipments due to cost uncertainty.
- Economic strain: Haiti’s last stable industry is contracting, threatening livelihoods and social stability.
Hurricane Melissa: A Compounding Crisis
Just weeks after the shutdown began, Hurricane Melissa struck Haiti as a Category 5 storm, causing widespread flooding, infrastructure damage, and displacement. While direct damage to export warehouses remains unclear, the storm disrupted:
- Road access and power supply near key industrial zones.
- Worker availability, as families relocated or lost shelter.
- Logistics and communications, further complicating production and shipping.
The timing couldn’t be worse. With trade preferences expired and infrastructure strained, Haiti’s apparel sector is facing a dual crisis economic and environmental.
AAFA Guidance: Flag Shipments for Duty Refunds
In response, the American Apparel & Footwear Association (AAFA) has issued guidance to U.S. brands and importers: flag all Haitian-origin shipments for potential duty refunds. This strategic move reflects a broader industry posture continue sourcing from Haiti while preparing for retroactive relief.
Flagging entries with U.S. Customs preserves the ability to recover duties paid if Congress reinstates HOPE/HELP retroactively. This allows brands to:
- Maintain continuity of supply without fully absorbing tariff costs.
- Avoid abrupt sourcing shifts that could disrupt holiday and Q1 inventory.
- Support Haitian manufacturing partners during a critical period.
Despite the tariff shock, many brands are holding steady:
- Holiday inventory is already in motion, and cutting off supply now would mean empty shelves.
- Haiti remains cost-competitive for certain SKUs, even with tariffs.
- Congressional support for renewal is strong, and many expect a fix before year-end.
- Flagged shipments offer a financial hedge, allowing importers to recover duties if preferences are reinstated.
U.S. Retail Risk: Holiday Inventory at Stake
Retailers typically lock in holiday inventory by early fall. The shutdown and hurricane hit just as final shipments were due, raising concerns about shelf shortages and price hikes in November and December especially in:
- Mass-market basics: Private-label T-shirts, underwear, and layering items.
- Uniform and promotional apparel: Bulk orders for schools, events, and corporate use.
- SMEs with lean cycles: Smaller importers with limited sourcing flexibility.
Sector-Specific Exposure: Brand-by-Brand Breakdown
Hanesbrands Inc. is among the most exposed to the disruption in Haiti. As a major producer of basic garments like T-shirts and underwear, Hanes relies heavily on Haitian factories for high-volume, low-cost production. The expiration of HOPE/HELP trade preferences has introduced significant cost pressure, and while Hanes continues to ship from Haiti, the company is actively flagging entries for potential duty refunds and monitoring legislative developments closely.
Gildan Activewear, another heavyweight in the basics category, sources cotton tees and private-label apparel from multiple Haitian facilities. Gildan has historically leaned on Haiti for its cost efficiency and proximity to U.S. markets. The company is expected to maintain operations in the short term, but may begin shifting production to Central America or the Caribbean if trade preferences aren’t reinstated soon.
Fruit of the Loom faces moderate exposure. While it sources undergarments and promotional apparel from Haiti, its sourcing footprint is more diversified than Hanes or Gildan. The brand is likely to continue importing from Haiti through the holiday season, especially for pre-booked inventory, but may reduce future orders if tariffs persist into 2026.
MAS Akansyel, a subsidiary of Sri Lanka’s MAS Holdings, operates out of the Caracol Industrial Park and specializes in athleisure and performance wear. While MAS has invested heavily in Haitian operations, the company is now grappling with logistical challenges and cost volatility. It remains committed to Haiti for now, but is exploring contingency plans to protect its global supply chain.
Levi Strauss & Co. has lower exposure compared to other brands. Levi’s sources casual wear and denim from Haiti through subcontractors, but its primary production hubs are located elsewhere. The company is monitoring the situation and may scale back Haitian sourcing if instability continues, though it’s not expected to be significantly impacted in the near term.
Uniform and promotional apparel distributors including those serving schools, corporate events, and bulk buyers are among the most vulnerable. These businesses rely on Haitian factories for cost-effective, high-volume orders, and many operate on tight margins. The sudden imposition of tariffs and logistical delays could force price increases, sourcing shifts, or order cancellations heading into Q1 2026.
Sourcing Strategy: Wait-and-See with Contingency Moves
Brands are not abandoning Haiti yet. But they are hedging:
- Diversifying sourcing to Central America and Asia.
- Reducing exposure to Haitian factories while monitoring legislative developments.
- Preparing contingency plans for Q1 2026 and beyond.
If HOPE/HELP aren’t renewed by early next year, a broader sourcing exodus is likely especially from cost-sensitive categories.
Strategic Recommendations for U.S. Importers
If you’re sourcing from Haiti, here’s what you should do now:
- Flag all Haitian-origin entries for potential duty recovery.
- Coordinate with customs brokers to ensure proper documentation.
- Monitor Congress closely for movement on HOPE/HELP renewal.
- Review your sourcing mix and prepare contingency plans for Q1 2026.
- Engage with AAFA and trade groups to stay informed and advocate for retroactive relief.
Looking Ahead: What 2026 Could Bring if the Shutdown Persists
As the crisis in Haiti’s apparel sector deepens, the stakes for 2026 are growing more acute. If the U.S. government shutdown continues into the new year and with it, the lapse of the HOPE and HELP trade preference programs the consequences will extend far beyond short-term sourcing disruptions. The apparel industry, Haitian economic stability, and U.S. trade credibility all stand to suffer lasting damage.
For Haiti: From Fragile to Fractured
Without a swift policy reversal, Haiti risks losing its last viable export engine. The apparel sector accounts for nearly 90% of the country’s formal employment outside agriculture, and its collapse would trigger:
- Mass unemployment, particularly among women and youth in urban centers.
- Increased migration pressure toward the U.S. and neighboring countries.
- Expanded gang recruitment, as economic desperation fuels instability.
- A breakdown in investor confidence, deterring future foreign direct investment in manufacturing or infrastructure.
The expiration of HOPE/HELP would also send a chilling signal to other developing nations: that U.S. trade preferences are politically fragile, undermining their utility as tools for development and diplomacy.
For U.S. Brands: Margin Compression and Sourcing Volatility
For U.S. importers and retailers, a prolonged shutdown would force a reckoning. Brands that have delayed sourcing shifts in hopes of retroactive relief will face hard choices:
- Absorb higher landed costs or pass them on to consumers eroding competitiveness in price-sensitive categories.
- Accelerate sourcing diversification, likely toward Central America, Bangladesh, or Vietnam regions with longer lead times and different compliance landscapes.
- Rebuild supply chains from scratch for SKUs that were once reliably fulfilled by Haitian partners.
This transition won’t be seamless. It will require new vendor vetting, compliance audits, logistics recalibration, and renegotiation of contracts all under the pressure of tight margins and unpredictable demand.
For U.S. Trade Policy: A Test of Credibility
The HOPE and HELP programs have long been held up as bipartisan success stories examples of how trade can be used to promote stability, development, and mutual benefit. Letting them expire indefinitely would:
- Undermine U.S. credibility as a trade partner, especially in the Western Hemisphere.
- Weaken regional sourcing strategies, just as brands seek to reduce reliance on China.
- Contradict broader U.S. policy goals in Haiti, including stabilization, anti-corruption, and migration deterrence.
In short, the failure to renew these programs would represent not just a policy lapse, but a strategic misstep with regional and global consequences.
Strategic Imperatives for 2026
If the shutdown persists into Q1 and beyond, sourcing and compliance teams should prepare for a new baseline:
- Reclassify Haitian-origin SKUs as tariff-liable in all forecasting and pricing models.
- Accelerate onboarding of alternative vendors, especially in CAFTA-DR countries.
- Monitor legislative calendars for any movement on trade preference renewal or retroactive relief.
- Engage with trade associations like AAFA to advocate for clarity and continuity.
For SMEs and large brands alike, 2026 may mark a turning point in how U.S. companies approach nearshoring, trade preference utilization, and risk management.