Fashion Braces for Impact as Trump Tariffs Returns

The Business of Fashion Podcast

The Business of Fashion

Fashion & Beauty, Business, Arts

4.6 • 770 Ratings

🗓️ 16 July 2025

⏱️ 19 minutes

🔗️ Recording | iTunes | RSS

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Summary

After turning to other matters for a few weeks, President Donald Trump has reignited his aggressive tariff strategy, threatening sweeping new duties on key fashion-producing nations starting Aug. 1, as well as a fresh set of new levies on the EU, Brazil, South Korea and other trade partners.

On this episode of The Debrief, correspondents Joan Kennedy and Marc Bain join hosts executive editor Brian Baskin and senior correspondent Sheena Butler-Young to unpack how brands are reacting, where prices are headed, and why diversification may no longer be the solution it once was.

Key Insights:

Apparel prices in the US are finally starting to reflect the cost of tariffs. "We got the first bit of evidence that tariffs are actually having an impact on prices," said Kennedy, pointing to new CPI data showing apparel prices up 0.4% in June. "They're starting to rise because we're seeing inventory start to trickle onto shelves that are affected by these new duties." Bain added that shoppers are particularly sensitive: "It’s about managing perceptions... It’s why you see these brands putting out Instagram posts about tariffs and why they’re raising prices."

Supply chain diversification isn't working like it used to. Brands once counted on shifting production as a way to dodge tariffs. But now, alternative hubs are also getting hit. "It is kind of like a game of whack-a-mole," said Kennedy. "One of the countries that was expected to benefit was Brazil... but we've seen a new 50% tariff threatened on Brazil." Bain noted that brands are now being advised to build in redundancy. "It’s not just about finding another source. It’s having some layer of redundancy built in."

In response to rising costs and consumer fatigue, brands are reducing product variety and pricing selectively. Levi's, for example, announced they’re going to discontinue certain less popular styles during the holiday shopping season. Bain explained the logic: "If you know these are more sure bets, you’re less likely to have to discount them later... so as you're trying to offset the cost going up from tariffs, you can try to reduce your costs in other places too." Kennedy added: "We've seen brands get smart about where exactly they make these price hikes... like upping the price on a more fashion item, but keeping prices on staples stable."

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Transcript

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0:00.0	Hello and welcome to the debrief from the Business of Fashion, where each week we delve into our most popular B.O.F. professional stories with the correspondents who created them. I'm executive editor Brian Baskin.
0:19.8	And I'm senior correspondent correspondent Sheena Butler Young.
0:22.9	For the last few weeks, the focus in Washington has been on passing the big, beautiful
0:27.2	bill and the conflict with Iran. But we're definitely back to all tariffs all the time now.
0:33.0	President Donald Trump has threatened punishing new duties on the EU, South Korea, and other trade partners,
0:38.9	and has set a deadline of August 1st for reciprocal tariffs to kick in on many other countries.
0:44.8	For an industry built on long lead times and global supply chains, unpredictability at this level
0:50.1	isn't just frustrating, it's costly. Fashion companies are already reporting losses and
0:54.9	rewriting expectations for the rest of the year. And as brands look to diversify production
0:59.6	away from Asia, the costs and complexities of those shifts are starting to add up.
1:04.2	Things are definitely getting interesting out there. And to check in on the state of play,
1:08.3	we've brought in our in-house tariff experts, Joan Kennedy and Mark Bain. Joan and Mark, welcome back to the debrief podcast. Hi, Brian. Thanks for having me. Hey, always nice to be back. So, Mark, can you just catch us up on the latest in terms of the state of play of tariffs? It sort of feels like I heard someone use this analogy, like a spinning wheel, like you go on a game show and you spin the wheel and this week the tariff is against, is on this country and is at this percent.
1:33.0	Can you sort of fill us in? Maybe that's not the best analogy, but I'd love to hear what you're seeing out there.
1:38.3	I mean, that's not the worst analogy either. That is kind of how it feels. So recently, Trump threatened about two dozen
1:47.4	trading partners with new tariffs that are now set to kick in on August 1st of varying degrees.
1:54.6	We still have this 10% universal tariff. We have seen some additional tariffs announced relevant to the fashion industry
2:04.3	is the 20% tariff on goods from Vietnam, or that actually goes to 40% if those goods originated
2:11.0	in another country. So that's clearly directed at a practice called trans-shipping of goods being
2:16.9	routed through Vietnam from China.
2:19.3	We have a 25% tariff on Japan and South Korea.
2:23.3	There's a new 50% tariff on Brazil, and we've just had this 30% tariff threatened on the EU and Mexico.
2:30.3	Whether all of this will kick in on August 1st, how these things will shift. Like, we are all waiting to see. We know a lot of things get said, and it doesn't mean that that's what ends up happening. What that means is the total effective tariff rate in the U.S. It was about 2.5% at the start of the year, and now it's up to about 16.6%. This is according to the budget lab at Yale University.
	...

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