Why Apparel Brands Are Looking to Peru for Duty-Free Manufacturing

For U.S. apparel brands, the question of where to manufacture isn’t just about cost and quality—it’s also about duty savings. One attractive option is manufacturing in Peru, thanks to the U.S.–Peru Trade Promotion Agreement (PTPA), which allows qualifying apparel to enter the United States duty-free.

The Advantage of 0% Duty with Peruvian Materials

Under the PTPA, apparel made in Peru using Peruvian-origin yarns and fabrics qualifies for zero duty when imported into the United States. This provides a significant savings opportunity compared to standard duty rates, which for apparel can often range from 10–20%.

The key is that most of the supply chain—yarns, fabrics, and final garment assembly—must come from Peru (or in some cases other approved partner countries). This keeps the value chain local while creating cost efficiency for U.S. brands.

Why Peru Is a Strong Manufacturing Partner

1. Rich Textile Tradition
Peru is known globally for its pima cotton and baby alpaca—luxury fibers prized for softness, durability, and natural performance. Using these locally sourced materials not only supports compliance with PTPA rules but also adds premium value to your product.

2. Competitive Quality & Pricing
Peruvian factories are experienced in producing both basics and high-end fashion. While labor costs are higher than some Asian markets, the duty-free advantage often offsets the difference.

3. Geographic Proximity
Peru’s shorter shipping routes to the U.S. mean faster turnaround compared to Asia, allowing brands to be more responsive to demand.

4. Sustainability & Transparency
More brands are leaning into sustainability. Peru’s integrated supply chain—where cotton is grown, spun, woven, and sewn locally—offers a transparent story that resonates with today’s consumer.

Apparel Categories That Perform Well in Peru

Peru’s factories are best known for:

• Knitwear: T-shirts, polos, dresses, and activewear made with pima cotton or blends.

• Sweaters & Outerwear: Baby alpaca and alpaca blends for luxury and contemporary brands.

• Basics: High-quality jersey, fleece, and casualwear with a premium feel.

Is Peru Right for Your Brand?

Manufacturing in Peru isn’t a one-size-fits-all solution. It’s ideal for brands that:

• Want to leverage natural fibers like pima cotton and alpaca.

• Sell at mid-to-premium price points where quality and sourcing story matter.

• Are looking for duty savings that make U.S. retail pricing more competitive.

For brands operating at lower margins or prioritizing high-volume fast fashion, Asia may still be the better fit. But for those seeking a balance of quality, sustainability, and financial efficiency, Peru is worth a closer look.

Let’s Build Your Peru Strategy

If you’re curious about how to manufacture in Peru and qualify for 0% duty under PTPA, I can help. As a fashion business consultant, I guide brands through sourcing, production, and duty optimization strategies—so you can save money while building a stronger brand story.

Reach out to me to start exploring your Peru production options today.