Author: Frannie Petersen
Topic: Tariffs on Fashion
On April 2, 2025, President Donald Trump’s declared “Liberation Day” unveiled a sweeping number of baseline tariffs on imported goods in more than 180 countries, including a 10% duty on all imports to the U.S. These measures immediately provoked panic across global markets and fear of an American recession set in, with implications that will directly affect the fashion industry. These tariffs aren’t only hitting large fashion retailers, but small businesses in the retail space, and somewhere much closer to home: your wallet.
How This Impacts the Fashion Industry
The fashion industry is one of the hardest hit industries by Trump’s imposed tariffs. Stock shares in major fashion retailers plummeted–-some by as much as 30%. The U.S. also faces additional challenges, being the world largest consumer of clothing, and more than 98% of the U.S. ‘s apparel imported. These tariffs are expected to disrupt the fashion supply chain from farmers to in-house seamstresses. Down to the sourcing of raw materials like cotton and silk, which are typically sourced from major supply countries like Pakistan and Bangladesh. With 29% and 37% tariffs, respectively, slapped onto prices without materials even making it to manufacturing.
These tariffs are even eating into luxury fashion and affecting long-standing designers. Many major luxury labels—like Gucci, Dior and Burberry—are facing tariffs up to 20% as their detailed craftsmanship lies in skilled workers in both France and Italy. With shoppers already planning to be frugal with their money in these uncertain financial times, top designers are forced to hike up prices to pay for the costly tariffs, and analysts predict a steep decline in American consumers’ purchasing power for luxury brands.
While many luxury giants will be able to survive these vast shifts in the retail space, smaller businesses and independent retailers may not. Companies like Shein and Temu, known for their extremely low costs, have previously been able to thrive due to exemption from import taxes as packages under $800 in value were able to ship from factories in China duty free. This model allowed for a loophole of selling directly to consumers for fast fashion companies operating overseas. Trump’s new protocols on imported goods have eliminated the $800 ‘de minimis’ exemption in many nations, including China. Now, every order placed on these fast-fashion websites will be charged import taxes, meaning that a $15 dollar T-shirt could cost over $23 without additional fees. Fast fashion e-commerce platforms that took advantage of low prices and high volume will lose their previous competitive advantage and reduce reliance on affordable foreign sellers. This also directly affects consumers taking advantage of cheap e-commerce—as for the foreseeable future, the low-cost high-volume model is not what it used to be.
What Now?
With Trump’s reelection and return to the center of the political stage, the future of global economies remains uncertain. Fashion industry experts fear that this disruption in the economy could set the global fashion industry back 50 years, with worries of a fractured market where European designers resort to selling mainly to the European market, and American brands retreat inward.
U.S. in-house manufacturers will rely on American consumers to survive. Though, brands themselves are not powerless. They can lobby and speak out to government officials. Similarly, consumers can resume their old shopping habits and avoid higher prices by shopping secondhand and buying locally or from U.S.-based brands. Luckily, tariffs do not apply to used goods—this includes secondhand and consignment stores, and platforms like Ebay and Facebook Marketplace are great places to find well-priced used goods.
While some price increase may be unavoidable, there are ways to reduce the impact:
- Shop Secondhand: Tariffs don’t apply to used goods. Thrift stores, Facebook Marketplace, eBay, and consignment shops can help you score deals while keeping items out of landfills.
- Buy Local or U.S.-Made: Domestic products aren’t subject to these import tariffs. Look for “Made in USA” tags when shopping for clothes, tools, or home goods.
- Wait It Out (If You Can): Some experts believe this could be a short-term policy shift. If you don’t need to make an urgent purchase—especially big-ticket fashion or electronics—it might be wise to wait.