The situation: The apparel industry will be disproportionately affected by reciprocal US tariffs, which are set to vastly inflate production costs while imperiling brands’ access to the world’s largest apparel market.

The problem: Apparel brands are particularly vulnerable to tariffs since the vast majority—97%—of clothing and shoes sold in the US are imported, mainly from China and Vietnam. The two countries accounted for 54.1% of US apparel and footwear imports last year, alongside Bangladesh (7.8%), Indonesia (8.3%), and India (5.6%), per data from the US International Trade Commission.

• Those markets have been subject to some of the highest tariff rates: 54% for China, 46% for Vietnam, 37% for Bangladesh, and 32% for Indonesia.
• Brands that manufacture their wares in Europe—like Inditex—will also be subject to a 20% tariff.

The repercussions: While companies with higher margins may be able to swallow the additional costs or pressure their suppliers into absorbing some of the expense, the most likely outcome is higher prices for consumers.

• Apparel prices will rise 8% as a result of the reciprocal tariffs alone, and 17% when accounting for all the proposed duties, according to an analysis by Yale’s Budget Lab.
• Those hikes will disproportionately affect lower-income households, who spend a bigger share of their income on apparel and footwear than wealthier shoppers.
• Apparel trade groups also warned that the duties will unfairly penalize women, given that women’s apparel is subject to higher tariffs than men’s clothing, even for the same types of products—a phenomenon known as “pink tariffs.”
• That could create an opportunity for secondhand retailers to gain share as shoppers look for ways to save.

No wiggle room: Faced with the potential devastation of their manufacturing industries, Vietnam, India, Indonesia, and other countries have signaled their willingness to negotiate with the Trump administration.

But it’s not clear exactly what the government wants. Vietnam’s offer to drop all tariffs on US imports “means nothing to us,” trade advisor Peter Navarro told CNBC, because it doesn’t address practices like value-added tax and IP theft that the administration considers “nontariff cheating.”

At the same time, moving manufacturing to the US is not an option for the vast majority of companies.

• That’s “simply impossible,” Morningstar analyst David Swartz told Fashion Dive, given the billions of dollars in investment and years required to reshore production.
• And history would suggest that tariffs alone aren’t enough of a reshoring incentive: As the US Fashion Industry Association noted, the industry hasn’t changed its sourcing practices despite having been subject to tariffs for decades.

Go further: Stay up-to-date on tariff news with our Live FAQ: The Impact of Trump's Tariffs on Consumers, Businesses, and Trade.

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