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Trade & Policy

When 18% Feels Like A Victory

• By  Textile Excellence
• February 15, 2026

You have to hand it to the Americans. They know how to sell a story.

In a span of months, they converted a blunt tariff escalation into a diplomatic “win” the world was expected to applaud.

India’s textiles and apparel going into the US were paying just 2–3.5% duty before the tariff theatrics. Then suddenly, tariffs jumped to 25%. Then 50%. There was even talk of 500% on imports from India. Nobody really believed 500%. But 25% and 50% were real enough to trigger emergency calls between Indian exporters and US brands.

US buyers - structurally allergic to cost absorption - pushed back. Indian exporters, already operating on razor-thin margins (or so we are told), recalibrated pricing, shaved margins further, and attempted to stay relevant. All this while watching competitors in South Asia enjoy lower tariffs. Turkey sat comfortably at 10%.

Then came the twist.

After India signed its trade agreement with the European Union, the US President publicly expressed displeasure. The much-anticipated India-US trade deal - supposedly months away - materialised overnight. Tariffs were “slashed” to 18%. Cue celebration.

But 18% is not 3.5%.

A 14.5 percentage point hike over earlier effective rates is not cosmetic. It is structural. It alters costing models, renegotiates risk allocation, and permanently shifts bargaining power within the supply chain.

Yet the mood turned jubilant.

Why?

Are margins not as wafer-thin as industry bodies routinely claim? If exporters could theoretically survive 25%, and are now relieved at 18%, were they prepared to absorb most of the delta? US buyers, if at all they agree to take on some of the tariff burden, have the freedom to quietly pass on the higher prices to consumers, enhancing their own margins amid widespread brand and store closures.

If exporters are genuinely relieved, the arithmetic demands scrutiny.

Why have no major textile and apparel associations issued a sober analysis of the long-term impact of an 18% regime? Why frame it as “industry secured” rather than “cost base permanently reset”?

Then comes the predictable panic over Bangladesh receiving zero duty on apparel made from US cotton. Before the current tariff theatrics, Bangladesh was already sourcing significant volumes of cotton from Brazil and India. The assumption that Dhaka will suddenly pivot wholesale to US cotton is strategically naïve. Even if it does, increased domestic cotton availability in India should theoretically ease prices. Demand–supply fundamentals have not been suspended.

Yes, Indian export supply chains are deeply US-centric. But markets evolve. Concentration risk is a choice.

What’s remarkable is not that the US raised tariffs. It’s that it raised them to levels where exporters absorb most of the pain - and then successfully reframed partial moderation as generosity.

Low-duty Chinese inflows are curtailed. Competitive landscapes are redrawn. US retailers regain pricing leverage.

And the global supplier base applauds an 18% tariff as relief.

That’s not just trade policy.

That’s positioning.

And we still call it free and / or fair trade?

Yes, Indian export supply chains are deeply US-centric. But markets evolve. Concentration risk is a choice. What’s remarkable is not that the US raised tariffs. It’s that it raised them to levels where exporters absorb most of the pain - and then successfully reframed partial moderation as generosity. Low-duty Chinese inflows are curtailed. Competitive landscapes are redrawn. US retailers regain pricing leverage. And the global supplier base applauds an 18% tariff as relief. That’s not just trade policy.