Apparel Industry: Tariffs Are Potentially Disastrous but Could Be Rescinded at Any Time

The Trump administration announced tariffs on imports to the US that are materially higher than had been expected. This policy has significant implications for apparel manufacturers and retailers as, according to trade associations and other sources, approximately 98% of clothing and 99% of footwear that is sold in the US is imported, primarily from Asia. Indeed, according to the United States Fashion Industry Association, about 60% of US apparel is supplied by just three Asian countries: China, Vietnam, and Bangladesh. These three nations were hit extremely hard by the new policy, as tariff rates were set at 54% for China, 46% for Vietnam, and 37% for Bangladesh. High tariffs were imposed on most other key apparel-sourcing countries in Southeast Asia as well.