Special Report
Tariff s, tensions, and textiles: What’s next for fashion
Johnny Shell, principal analysist, Keypoint Intelligence
In this article, textile and apparel manufacturing expert and principal analyst at Keypoint Intelligence, Johnny Shell, outlines what all this talk of tariff s means for the garment manufacturing industry.
Representative Ambassador Jamieson Greer, includes a 90-day pause on trade escalations and mutual tariff reductions. China agreed to lower its tariffs from 115% to 30%, while the US held steady at the previously announced 10%.
Market reactions and industry exposure
O
n April 9, 2025, President Trump announced a 90-day suspension of most newly imposed tariffs, reducing them to a uniform 10% for countries that had not retaliated against US trade measures.
The move came after signifi cant market volatility and was positioned as a strategic step to encourage bilateral negotiations. Notably, tariffs on Chinese imports were raised to 125%, escalating tensions between the US and China. Since then, the two countries have reached a preliminary trade agreement that reduces tariffs, halts retaliatory actions, and sets the stage for broader cooperation on key issues – including fentanyl traffi cking. The White House announced the deal on May 12, 2025, as part of its broader push to restructure global trade and support American economic interests.
The agreement, revealed during a press conference in Geneva by US Treasury Secretary Scott Bessent and US Trade
| 32 | June 2025
The May 12 announcement sparked another wave of optimism in fi nancial markets. Major fashion and luxury companies saw strong gains, including Nike, which rose 7%; Lululemon, up 9%; and LVMH, which increased by 6.4%. The S&P 500 and Nasdaq jumped 3.3% and 4.4% respectively, while the Dow Jones Industrial Average surged nearly 1,200 points. Although the numbers did not match the April 9 upswing, it was signifi cant.
Still, the fashion and footwear industries are still heavily exposed due to their dependence on imports. Roughly 98% of clothing and 99% of shoes sold in the US are produced overseas. Brands that had already moved production to Vietnam, Cambodia, Indonesia, and Thailand to sidestep earlier tariffs now face renewed challenges in the shifting trade landscape.
While the tariff rollback provides some breathing room, it’s a stopgap, not a solution. Fashion brands must begin to reimagine their supply chains – not just relocate them – by investing in technologies that allow for localised, agile production.
Supply chain challenges A temporary tariff pause doesn’t erase the underlying complexity of global supply chains. Relocating production
is no simple feat and comes with limited viable alternatives. Countries like Bangladesh and India offer cost advantages but struggle with infrastructure and logistics. Mexico and Central America benefi t from proximity but may lack capacity for high-volume manufacturing. Meanwhile, domestic US production remains minimal – less than 3% of apparel and just 1% of footwear is made at home.
Consumer impact
Historically, much of the cost burden from tariffs has been passed on to consumers. Now, we’re seeing more pull-forward behavior – consumers buying early in anticipation of rising prices. A pair of running shoes from Vietnam, for example, could jump from $155 to $220. This shift refl ects concerns around both affordability and availability.
Strategic considerations Brands are being forced to take a hard look at their sourcing strategies to build more resilient supply chains. That means diversifying production across regions to avoid overreliance on any single country. It also means investing in tech – like digital design, AI-driven demand forecasting, and even on-demand manufacturing. Micro-factories may soon be viable for certain product categories, offering new levels of fl exibility. The convergence of trade volatility and shifting consumer expectations is accelerating the need for digital transformation in apparel production. Those who adapt by leveraging automation and on-demand models will be the ones best positioned for long-term growth.
www.printwearandpromotion.co.uk
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