The temporary Section 122 tariff covering most US imports expires on July 8, and with the Section 301 framework intended to replace it still under review, the Trump administration is set to revive bilateral tariff letters as its fastest tool for setting country-specific apparel import rates.

The mechanism has a proven track record. In July 2024-style sequence repeated last year, Trump issued tariff letters to multiple countries setting new reciprocal rates effective August 1. Bangladesh, Cambodia, Sri Lanka and Bosnia were among the recipients; Vietnam secured a separate agreement. The announced rates functioned as negotiating anchors, not final outcomes. Bangladesh ran seven rounds of negotiations before locking a lower rate by the August deadline, and Sri Lanka also negotiated its rate down from the initial letter.

What changed the legal footing?

The framework shifted on February 13, when the US Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) did not authorise these tariffs. The same day, the White House invoked Section 122 of the Trade Act of 1974, imposing a temporary tariff pending a replacement framework. Section 122 is capped at 150 days, which places its expiry on July 8.

Meanwhile, USTR's Section 301 investigations — covering one group of countries for structural excess capacity and another for forced-labour practices — remain at the public comment stage. That gap between a sunsetting authority and a lagging replacement is what makes bilateral letters the likely near-term instrument again.

What does the trade data show?

TexPro data through the first quarter gives a clear read on the post-letter sourcing map for US knit and woven apparel imports (HS 61 and HS 62):

• Vietnam extended its lead on a trailing four-quarter basis and captured the largest single share of quarterly apparel volume among the six letter-recipient countries.
• Cambodia posted the strongest growth on a trailing four-quarter basis, driven by a late-quarter surge.
• Bangladesh held firm on a trailing four-quarter basis, with modest year-on-year growth.
• Sri Lanka stayed flat.

The latest quarterly figures, however, point to moderation. Bangladesh's apparel exports to the US declined year on year in the most recent quarter. Cambodia's momentum eased from the prior quarter, and Vietnam's quarterly growth slowed. Buyers appear to have absorbed the first round of tariff adjustments, with volumes stabilising under the new cost structure.

Why did sourcing performance diverge?

Tariff outcomes, not letter headlines, drove the divergence. Countries that signed reciprocal trade agreements — Bangladesh in February, along with Cambodia, Malaysia and Pakistan — now fall within the lower tier of USTR's proposed Section 301 forced-labour framework. Sri Lanka and Vietnam, which have yet to secure comparable agreements, face a higher default rate.

The differential is measured in single percentage points, but it carries significant weight in an industry with exceptionally thin margins. Cambodia's double-digit import growth against Sri Lanka's flat performance illustrates how a negotiated outcome translated directly into sourcing competitiveness.

What does this mean for landed cost?

For sourcing executives, the critical question is what follows July 8. If Section 122 expires before a Section 301 framework is implemented, tariff exposure will depend increasingly on bilateral agreements. Countries with signed deals enjoy greater tariff certainty; those without remain exposed to future revisions.

The dollar stakes are concrete. Based on TexPro's trailing four-quarter data, the tariff differential across Bangladesh's multi-billion-dollar apparel export base represents hundreds of millions of dollars in annual landed-cost variance. Applied to Vietnam's even larger apparel trade, the same differential approaches an even larger figure.

What comes next?

The immediate risk is a repeat of the policy uncertainty seen during July and August of last year. Sri Lanka, the most notable country still without a reciprocal agreement, is likely to pursue last-minute bilateral negotiations before Section 301 tariffs take effect.

USTR has also proposed a textile-specific mechanism linking preferential tariff treatment to purchases of US cotton and man-made fibre — potential relief for exporters willing to increase US input sourcing, and a variable cotton-origin buyers should now model in their cost sheets.

If Section 301 implementation extends beyond the Section 122 deadline, further bilateral tariff letters or negotiated side agreements are likely within weeks. Brands should treat signed reciprocal trade agreements as the credible cost floor and price sourcing scenarios for a several-point tariff swing on countries without settled deals.