President-elect Donald Trump says tariffs will help American industries. U.S. apparel brands, retailers and manufacturers say otherwise.
Trump announced on Truth Social that he plans to introduce an additional 10% tariff on goods from China and a 25% tariff on goods from Mexico and Canada. While Trump’s camp claims that this protectionist policy would help US businesses, many industries–particularly apparel retailing and manufacturing–are preparing for massive shake ups along the supply chain and additional costs to consumers.
“I don’t see any upside to brands or retailers; I don’t see any upside for the customers,” said Margaret Bishop, supply chain expert and adjunct faculty at Parsons School of Design and the Fashion Institute of Technology. “What I see is a net negative all the way around.”
China, Mexico and Canada are the country’s top three trading partners. Goods imported from each country total $551 billion, $438 billion and $421 billion, respectively, according to data from the Observatory of Economic Complexity.
Previously, Trump had promised a 10% to 20% tariff on all imports, with a 60% to 100% tariff on goods from China.
If implemented, Trump’s tariffs would negatively impact the American economy, affecting industries from oil to electronic goods to automobiles and reducing consumer spending power. A recent report from EY Parthenon expects the proposed tariffs to reduce the GDP by 2.1% in 2026 and raise consumer price inflation by an average of 0.4 percentage points in 2025.
The tariffs would spell trouble for the American apparel industry, in particular. Currently, only 3% of clothing in the United States is produced domestically. According to a September report from the US International Trade Commission, apparel imports to the country totaled over $79.3 billion in 2023, with most clothing being imported from Asia. While apparel imports from China have declined by 16.7% since 2013 due to the COVID-19 pandemic changes and corporate concerns about forced labor, the country still produces 21% of all clothing imported into the States, the highest share of any single country.
Proposed tariffs could benefit domestic apparel in some ways. Using Trump’s previous mention of a 10% tariff on all imports and an additional 60% on China, the National Retail Federation estimated that some U.S. apparel manufacturers would see at least a $712 million boost in revenue. However, many would still not be able to absorb the cost, passing along higher prices to their customers.
TS Designs president Eric Henry, whose company focuses on sustainable screen-printing for t-shirt brands, expects certain products to become more expensive than others. For example, textile dye, of which China is the leading manufacturer, is not often produced domestically due to how environmentally harmful it is.
“If we have to pay more for dyes, then we have to charge our customers more for the services we offer,” said Henry.
Under the threat of tariffs, more apparel companies are seeking suppliers in other countries to reduce their reliance on China. In a November earnings call, Steve Madden CEO Edward Rosenfeld said that the company is developing its supply chains in countries such as Cambodia and Vietnam. According to Rosenfeld, about 70% of the brand’s imports are sourced from China.
Supply chain diversification is especially important due to how easily they can be affected by changes in policy or even weather, said Mike Short, president of Global Forwarding at C.H. Robinson.
“It’s like a puppet with strings,” said Short of supply chains. “More often than not, external events and disruptions pull the strings in opposite directions.”
Aside from diversifying supply chains, supply chain expert Margaret Bishop said other strategies companies might use to avoid tariff costs are to have merchandise shipped early to circumvent them altogether and to alter the garment to fit in a category with lower tariffs.
Both pose challenges for the apparel industry. Because fashion trends are so quick to change, the lifespan of merchandise is finite, said Bishop, which can lead to risky expenses for brands and retailers. Meanwhile, tariff engineering can ultimately change the entire character of the fabric, from its feel and durability to how long it takes to launder.
Even supply chain diversification poses issues for brands because of the time it takes to find and appraise potential factories. It often takes a minimum of one to two years to approve a factory.
“That’s pretty tough to do,” Bishop said of approving new factories. “The factories that do good work, they’re not sitting around with nothing to do. They’re busy. And, if anything, they’re turning away orders rather than waiting for more orders to come.”
Another issue facing domestic brands is the availability of labor. According to the Bureau of Labor Statistics, the number of total employees in the apparel manufacturing industry has fallen by nearly 90% since 1994.
“It doesn’t matter how much incentive you might provide a company like that to increase their production in the US,” said Bishop. “If you can’t get the workers, you don’t have a business.”
Supply chain holdups and labor issues would ultimately raise consumer prices. These costs increase even higher as wholesale prices are converted into retail prices.
Henry expects certain products necessary for clothing production to become more expensive than others. For example, textile dye, of which China is the leading manufacturer, is not often produced domestically due to its environmental harm.
“If we have to pay more for dyes, then we have to charge our customers more for the services we offer,” said Henry.
Higher prices, Bishop said, will hurt some Americans more than others.
“The people who will be hurt the most by any kind of a tariff on clothing are the people with the more modest incomes, the people at the lower economic scale because a larger percentage of their income has to go to food and clothing and shelter,” said Bishop.
For smaller apparel manufacturers like Henry, there may be no gains. Henry does not expect tariffs to significantly help his business.
“Cheap clothes are going to get a little more expensive,” said Henry. “It’s still much cheaper than making them here.”
Ultimately, Henry said he believes the tariffs are more complex than Trump has painted them, especially for the apparel industry.
“Global trade is super complicated,” said Henry. “You can’t just say, ‘We’ll do this,’ and it all be magically great again. It doesn’t work that way.”