WTF are the fashion industry and Asia going to do with these tariffs?

The tale of President Donald Trump’s tariffs began on inauguration day in January. It started small, with proposals of 25 percent tariffs on Canada and Mexico, soon extending to China, and eventually every country on the planet. Exact numbers have since increased and decreased, with retaliatory tariffs being put in place by other countries in response. As the back and forth continues, consumers and manufacturers are both left in the lurch to navigate the rapidly shifting landscape of trade, and at the heart of the confusion may be the fashion industry. 

According to a report by The Budget Lab at Yale University in April, the Trump administration’s initially proposed tariffs across the board would disproportionately affect clothing and textiles specifically, and consumers can face up to 64 percent higher prices in the short run. In the long run, brands will likely make changes to substitute for cheaper alternatives in their manufacturing processes, but despite the quality of apparel actually going down, clothing prices will continue to stay high, never recovering from the initial price hikes.

While all clothing brands who manufacture products in China are at risk, fast fashion companies—those that seek to rapidly mass produce inexpensive and low-quality clothing in response to quick changing trend cycles—are at the top of mind for many. Over the last five years, Chinese companies Shein and Temu have quickly risen in the ranks of preferred online retailers in the United States. In February alone, the Shein app registered more than one million new downloads on iPhones and iPads, and Shein.com was the number one leading fashion e-commerce store in the United States in 2024. Amidst a laundry list of controversies that surround the site, including abhorrent labor practices, Shein is known for having some of the lowest prices across the globe, and a portion of what made such prices possible was the corporation’s reliance on a “de-minimis” tax exemption, a nearly century-old trade rule that had previously allowed companies in China to ship low-value goods directly to consumers in the United States without taxes. 

Earlier this year, however, the Trump administration voided this exemption through an executive order, leading to an end of the process that allowed Chinese e-retailers to keep prices low. In response, Temu even stated that it would stop selling goods from China directly to U.S. customers. “All sales in the U.S. are now handled by locally based sellers, with orders fulfilled from within the country,” the brand said in a statement, "the move is designed to help local merchants reach more customers and grow their businesses.” Shein also raised prices of products considerably, with a survey by the Washington Post showing that prices across the site were increased by an average of 43 percent.

The quickly shifting and unpredictable nature of the Trump administration's policy-making has resulted in back and forth changes in tariff rules, with the latest being another rollback. After recent negotiations between the United States and China, the president has lowered the tariffs on low-value goods from 120 percent to 54 percent, and the United States will lower tariffs on imported Chinese goods from 145 percent to 30 percent, while China's retaliatory tariffs on U.S. goods will drop from 125 percent to 10 percent. Whether these numbers will stay as they are is yet to be seen.