Printwear & Promotion The Total Promotional Package
In this article, textile and apparel manufacturing expert and principal analyst at Keypoint Intelligence, Johnny Shell, outlines what all this talk of tariffs means for garment manufacturing.
On April 9, 2025, President Trump announced a 90-day suspension of most newly imposed tariffs, reducing them to a uniform 10% for countries that had not retaliated against US trade measures.
The move came after significant market volatility and was positioned as a strategic step to encourage bilateral negotiations. Notably, tariffs on Chinese imports were raised to 125%, escalating tensions between the US and China.
Since then, the two countries have reached a preliminary trade agreement that reduces tariffs, halts retaliatory actions, and sets the stage for broader cooperation on key issues – including fentanyl trafficking. The White House announced the deal on May 12, 2025, as part of its broader push to restructure global trade and support American economic interests.
The agreement, revealed during a press conference in Geneva by US Treasury Secretary Scott Bessent and US Trade Representative Ambassador Jamieson Greer, includes a 90-day pause on trade escalations and mutual tariff reductions. China agreed to lower its tariffs from 115% to 30%, while the US held steady at the previously announced 10%.
Market reactions and industry exposure
The May 12 announcement sparked another wave of optimism in financial markets. Major fashion and luxury companies saw strong gains, including Nike, which rose 7%; Lululemon, up 9%; and LVMH, which increased by 6.4%. The S&P 500 and Nasdaq jumped 3.3 % and 4.4% respectively, while the Dow Jones Industrial Average surged nearly 1,200 points. Although the numbers did not match the April 9 upswing, it was significant.
Still, the fashion and footwear industries are still heavily exposed due to their dependence on imports. Roughly 98% of clothing and 99% of shoes sold in the US are produced overseas. Brands that had already moved production to Vietnam, Cambodia, Indonesia, and Thailand to sidestep earlier tariffs now face renewed challenges in the shifting trade landscape.
While the tariff rollback provides some breathing room, it’s a stopgap, not a solution. Fashion brands must begin to reimagine their supply chains – not just relocate them – by investing in technologies that allow for localised, agile production.
Supply chain challenges
A temporary tariff pause doesn’t erase the underlying complexity of global supply chains. Relocating production is no simple feat and comes with limited viable alternatives. Countries like Bangladesh and India offer cost advantages but struggle with infrastructure and logistics. Mexico and Central America benefit from proximity but may lack capacity for high-volume manufacturing. Meanwhile, domestic US production remains minimal – less than 3% of apparel and just 1% of footwear is made at home.
Consumer impact
Historically, much of the cost burden from tariffs has been passed on to consumers. Now, we’re seeing more pull-forward behavior – consumers buying early in anticipation of rising prices. A pair of running shoes from Vietnam, for example, could jump from $155 to $220. This shift reflects concerns around both affordability and availability.
Strategic considerations
Brands are being forced to take a hard look at their sourcing strategies to build more resilient supply chains. That means diversifying production across regions to avoid overreliance on any single country. It also means investing in tech – like digital design, AI-driven demand forecasting, and even on-demand manufacturing. Micro-factories may soon be viable for certain product categories, offering new levels of flexibility.
The convergence of trade volatility and shifting consumer expectations is accelerating the need for digital transformation in apparel production. Those who adapt by leveraging automation and on-demand models will be the ones best positioned for long-term growth.
Policy and trade outlook
The textile and apparel sector is unpredictable enough on its own. Add in volatile trade policy, and the operational risks increase substantially. The use of tariffs as a strategic weapon – rather than a fiscal tool – makes long-term planning incredibly difficult. Industry groups continue to push for clearer policies and potential exemptions for critical product categories. But without consistency, major investments in regional manufacturing remain hard to justify.
The 90-day pause offers short-term relief, but the structural issues remain. Brands must move from reactive cost-cutting to proactive risk management – focusing on supplier diversity, operational flexibility, and digital integration. In a world where trade policy is as unpredictable as the markets themselves, the key to long-term success lies in building truly resilient supply chains.
Adapting marketing and business strategies
These pricing decisions will inevitably affect consumer demand. Brands that pass on tariff-related costs could see a dip in sales, as shoppers delay purchases or look for alternatives. Those that absorb the costs to stay competitive may feel the squeeze on margins, which could hinder investment in innovation and growth.
It’s critical to evaluate the financial impact and adjust pricing models accordingly. Building relationships with alternative suppliers – even within existing geographies – and increasing inventory levels can provide a buffer against disruptions.
Marketing strategies also need to adapt to changing market conditions. Transparent communication with customers around price changes, sourcing decisions, and digital transformation initiatives can go a long way in maintaining trust and loyalty.
Internally, it’s essential to reassure brand partners that tariff risks aren’t being passively absorbed but are being actively and strategically managed. That means emphasising your commitment to lean operations, reducing waste, and continuing to automate production wherever possible. You’re also optimising logistics and refining inventory strategies to stay nimble in a volatile environment.
Equally important is how you present yourself as a proactive, informed partner. Sharing how you’re navigating cost pressures and shifting trade policies builds trust. Offering visibility into production timelines, sourcing decisions, and contingency plans reinforces transparency. And by educating both internal teams and external stakeholders on your broader strategy, you help align expectations, strengthen confidence, and deepen the partnerships that matter most.
By taking action – whether through supply chain adjustments, revised pricing, or enhanced service offerings – companies can navigate the uncertainty of the current moment while positioning for growth in a more digital, dynamic future. The key is to build trust through transparency, reassurance, and a consistent record of value delivery.
The best way to navigate these shifting realities? Stay informed. Keep reading, keep listening. Keypoint Intelligence will continue to deliver the insights and clarity you need to plan ahead, adapt, and make better-informed decisions.
