On Wednesday, Donald Trump announced that he was imposing tariffs (taxes on imported goods) on over 180 countries, including some of fashion’s most important manufacturing regions. And the question on every fashion mfer’s mind rn is “how will this affect my drip?”
The U.S. President put the tariffs in place in an attempt to increase production—and therefore jobs—inside America (though America doesn’t have that kind of manufacturing capacity), including in the apparel industry, as 98% of the US’s apparel is imported. He has dubbed the day in which the tariffs were enacted “liberation day.”
They include a 10% duty on all imports to the US, but many countries face much higher rates. China (where Prada outsources its production) will be charged 54%, Vietnam (where Nike produces most of its footwear) will have to pay 46%, and the EU— which accounts for at least 70% of the global luxury goods market—will have to pay a 20% tariff.
This has already had a huge impact on fashion, with stocks plummeting almost instantly. Shares in Burberry have dropped by 16%, while Kering’s and LVMH’s stocks also dropped. Rumours have even circulated that Prada could stall its acquisition of Versace. Meanwhile, shares in Puma, Adidas, and Nike have also taken a hit.
Brands spending increasing means they’ll raise their prices to cover the cost. This is on top of existing price rises, with the average price of luxury goods having risen by 52% since 2019.
Considering the economy is already in a downturn, Trump’s tariffs could spell disaster for the fashion industry. The Guardian has speculated that this could have more of an impact on aspirational shoppers than the hyper-wealthy, and may also increase peoples’ purchasing of fake goods. Many are hoping that Trump is using this as a bargaining chip as opposed to long-term strategy, but either way, people will be buying less, and brands will be left with the dilemma of whether or not to re-locate to the US.
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