Cotton Inc warns tariffs driving apparel price surge

US apparel prices have risen sharply in 2026, driven by tariff uncertainty and a volatile macroeconomic backdrop, according to Cotton Incorporated's June 2026 Executive Cotton Update.

The monthly briefing reports that the Consumer Price Index for garments rose by more than one percentage point in both February and March — among the sharpest monthly gains in clothing prices since the pandemic. Retail clothing prices now stand roughly six percentage points above their 2014 baseline.

Cotton futures have also softened, with the New York Nearby contract averaging 81.7 cents per pound in May, down from a five-year average of 85 cents. The Cotlook A Index averaged 92 cents/lb in May.

On the trade policy front, the report flags that Section 122 tariffs — which applied a 10-percentage-point increase on imports from nearly all countries — are set to expire on 24th July. Replacement duties under Section 301 are under active consideration following investigations into forced labour and excess capacity, with findings released on 2nd June.

A Federal Register summary noted potential carve-outs for textiles made with US cotton, though details remain unclear.

Average cost per square metre of cotton-dominant apparel stood at $3.67 in April — down 0.5% year-on-year but 9.3% above the pre-tariff three-year average.