President-elect Donald Trump’s proposed tariff increases are aimed at encouraging American manufacturing, but they will have unintended consequences for the fashion industry. With 98% of clothing sold in the United States being produced abroad, this policy could lead to higher prices for consumers and challenges for brands dependent on global supply chains. While the intention is clear, the repercussions could reshape the industry and alter consumer behavior.
“On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders,” Trump announced in a Truth Social post.
In a follow-up post, he wrote that the U.S. “will be charging China an additional 10% tariff, above any additional tariffs, on all of their many products coming into the United States of America.”
For the fashion industry, the implications are severe. According to the National Retail Foundation, tariffs could raise the cost of clothing by as much as 20%, costing shoppers up to $78 billion in annual spending power. Mid-tier and fast-fashion brands like Zara and H&M may be forced to pass these costs onto consumers, making affordable options less accessible.
Tariffs have often backfired economically. Investopedia writes that although the Smoot-Hawley Tariff Act of 1930 raised tariffs by about 20% to protect U.S. industries, at least 25 countries retaliated by placing their own tariffs. Followed by warnings from various economists, this caused global trade to collapse and worsened the Great Depression.
The 2002 steel tariffs under President George W. Bush also illustrate the unintended consequences of protectionist policies. The Tax Foundation showed that while the tariffs were aimed at protecting the U.S. steel industry, they led to higher steel prices and caused more job losses in related industries than the total number of jobs in steel production.
Similarly, the Section 232 steel and aluminum tariffs under President-elect Trump saved jobs in steel production but at a steep cost. The Tax Foundation reported that each job saved actually cost an estimated $650,000, as higher production costs reduced employment in other industries and made U.S. exports less competitive. These tariffs ultimately hurt consumers and manufacturers alike.
If President-elect Trump’s tariffs take effect, fast-fashion brands may compromise on quality to keep prices low. According to French international magazine Marie Claire, companies might resort to cheaper fabrics, less durable finishes or reductions in packaging. For consumers, this could mean paying the same price for inferior products.
On the other hand, the policy could lead to shifts in consumer behavior. With mid-tier brands becoming less affordable, some shoppers might prioritize quality over quantity, investing in fewer, longer-lasting items. Others may seek even cheaper alternatives, focusing on maximizing their purchasing power and reshaping the fashion landscape, favoring either luxury or low-cost brands.
Critics argue that these tariffs fail to address the core issues of global manufacturing. Shawn Grain Carter, a professor at the Fashion Institute of Technology, noted that fast fashion is especially sensitive to price increases and middle-class consumers may feel the greatest strain.
“Prepare for even middle-class fashion and affordable brands to feel more out-of-reach,” . These changes could widen the gap between high-end and affordable options, leaving fewer choices for average shoppers.
Supporters of tariffs believe they can revive American manufacturing by incentivizing companies to produce domestically. However, achieving this requires more than just taxation.
U.S. manufacturing faces high labor costs, regulatory hurdles and a lack of infrastructure compared to countries like China. Without significant investment in technology and innovation, bringing production back to the U.S. remains an expensive and slow process.
A more balanced approach could mitigate the negative economic consequences of drastic tariff increases. Instead of relying solely on tariffs, the government could invest in marketing campaigns promoting American-made products, which would foster national pride and encourage consumers to buy domestically.
A “Buy American” initiative could further strengthen this effort and help support local industries without inflating consumer prices.
Additionally, focusing on innovation and technology could help make U.S. manufacturing more competitive. By improving efficiency and reducing production costs, the U.S. can lessen its reliance on low-cost foreign manufacturing while keeping prices fair for consumers.
This strategy would not only support American businesses but also create a sustainable, long-term solution to the challenges posed by international trade.
While Trump’s tariffs aim to boost American manufacturing and businesses, their impact on the fashion industry could be extensive.
From rising costs to shifting consumer behaviors, the policy will cause challenges for brands and shoppers alike. A less intense, more strategic approach is necessary to balance economic growth, affordability and the goal of revitalizing American manufacturing.
