Tariffs are reshaping the fashion industry—from sourcing decisions to shelf prices. What used to be a simple import cost has now become a major strategic factor in how brands choose suppliers and price their products.
U.S. tariffs raise the cost of imported apparel, which leads to higher retail prices and forces brands to rethink supplier relationships and global sourcing strategies.
Let’s break down how tariffs change clothing prices, impact supply chains, and influence world trade in the apparel sector.
How will tariffs affect clothing?
Tariffs act like a tax on imported goods. When the U.S. imposes a tariff on clothing from a specific country, the landed cost goes up—sometimes by double digits.
Tariffs increase the cost of importing clothing, which often results in higher retail prices or thinner profit margins for brands.
What does this look like in real numbers?
| Product Type | Base U.S. Duty | Extra Tariff (China) | Total Tariff1 |
|---|---|---|---|
| Cotton T-shirt | 16.5% | +7.5% (Section 301) | 24% |
| Polyester hoodie | 32% | +25% (China) | 57% |
| Knit babywear | 14.9% | +0–7.5% | Up to 22.4% |
Tariffs can turn a $3 factory cost into $4 or more—before freight, warehousing, or retail markup.
How do brands typically respond?
- Raise prices2 to cover duty increases
- Switch suppliers to low-tariff countries
- Redesign products to fit a lower-duty classification
- Work with DDP (Delivered Duty Paid) vendors who cover import taxes
At Fumao, we advise clients on cost-saving strategies3 before they commit to production—so there are no surprises at the port.
How does tariff affect supply and demand?
When tariffs raise prices, consumer demand usually reacts. In fashion, that can mean fewer purchases, lower sell-through, or more discounting to clear inventory.
Tariffs affect supply and demand by increasing production costs (shifting supply) and raising retail prices (lowering consumer demand).
What happens to supply?
- Brands reduce order quantities due to higher per-unit cost
- Some cancel new styles or collections entirely
- Smaller retailers avoid certain SKUs due to cost volatility
What happens to demand?
- Shoppers notice higher prices and delay purchases
- Sales move to lower-priced alternatives or fast fashion
- Brands offering better value or local production win more loyalty
| Economic Side | Effect of Tariff |
|---|---|
| Supply | Higher cost = less production |
| Demand | Higher price = lower demand |
If both decline, total market volume shrinks—which hurts factories, shippers, and even U.S. jobs.
That’s why many brands are pushing for flexible sourcing4, smaller batches5, and higher perceived value per garment6.
How much clothing is imported to the US?
The U.S. is one of the biggest apparel markets in the world—and it relies heavily on imports. Domestic production is small by comparison.
Roughly 97% of clothing sold in the U.S. is imported, with China, Vietnam, Bangladesh, and India being the top sources.
What are the top apparel import countries?
| Country | U.S. Clothing Import Share |
|---|---|
| China | ~27% |
| Vietnam | ~18% |
| Bangladesh | ~8% |
| India | ~5% |
| Mexico | ~4% |
This reliance means tariff changes in just one region—especially China—have an outsized effect on U.S. pricing and sourcing decisions.
What does this mean for supplier selection?
U.S. brands must now:
- Vet new factories in Vietnam, Bangladesh, India, or Latin America7
- Choose vendors that support DDP pricing or multi-country capabilities8
- Understand how HTS classifications and trade agreements9 affect each shipment
At Fumao, we help clients split production across tariff-friendly regions and manage classification audits that reduce long-term import costs.
What is the impact of tariffs on world trade?
Tariffs don’t just affect one country—they ripple across supply chains, reorder global priorities, and reshape trade relationships.
Tariffs disrupt world trade by reducing global demand, shifting production hubs, and triggering retaliatory trade measures between countries.
How does this play out in apparel?
- Brands leave China for Vietnam, but capacity in Vietnam becomes overbooked
- Production moves to Bangladesh or Mexico, raising wages and shipping demand there
- Some countries impose their own tariffs in response to U.S. moves
| Tariff Action | Global Response |
|---|---|
| U.S. adds duty on China | Brands move production elsewhere |
| China raises duties on U.S. cotton | Hurts U.S. textile exports |
| Brands seek EU factories | Increases nearshoring in Europe |
World trade becomes more fragile when tariffs pile up—especially for industries like fashion that depend on complex global supply chains.
How can brands stay competitive?
- Use multi-country sourcing plans10
- Build relationships with flexible, tariff-aware suppliers11
- Invest in digital tracking of duties and compliance12
In a shifting trade environment, agility wins.
Conclusion
U.S. tariffs raise apparel prices and influence how brands choose suppliers. But with careful planning—choosing the right countries, working with informed partners, and designing smarter supply chains—brands can control costs, serve customers, and stay profitable in any trade climate.
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Understanding Total Tariff helps businesses plan their import costs effectively and avoid unexpected expenses. ↩
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Exploring how brands adjust pricing strategies can provide insights into market dynamics and consumer behavior. ↩
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Learning about cost-saving strategies can help businesses mitigate the impact of tariffs and improve their bottom line. ↩
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Explore this link to understand how flexible sourcing can help brands adapt to market changes and improve efficiency. ↩
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Learn about the advantages of smaller batches, including reduced waste and increased responsiveness to market trends. ↩
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Discover strategies to enhance perceived value, which can lead to increased customer loyalty and sales. ↩
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Exploring this resource will provide insights into the advantages of sourcing from these regions, helping brands make informed decisions. ↩
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Understanding DDP pricing and multi-country capabilities is crucial for brands looking to optimize their supply chain and reduce costs. ↩
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This link will clarify the complexities of HTS classifications and trade agreements, essential for effective import management. ↩
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Exploring this resource will provide insights on how multi-country sourcing can enhance flexibility and competitiveness in the apparel industry. ↩
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This link will guide you on identifying suppliers who can adapt to changing tariffs, ensuring smoother operations for your brand. ↩
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Understanding digital tracking can help brands manage tariffs effectively, reducing costs and improving compliance in a complex trade landscape. ↩
