Impact of Tariffs on Fashion Industry
The global tariffs imposed by the Trump government, which came into force on August 7, have presented a significant challenge to designers preparing for New York Fashion Week. With only five weeks to go before the event, these new tariffs have added another hurdle to the already precarious balancing act of conducting an indie fashion startup.
Effects on Designers
Jacques Agbobly, founder and creative director of his eponymous label, has had to cut back on the number of looks in his show due to the increased cost of certain textiles. His brand, which specializes in handmade, Togolese-inspired designs, sources materials from the New York district, which imports most of its materials from Asia. The 15 percent tariff on South Korean imports has made some materials, such as satin-face organza, too expensive to use.
Tariff Rates
American tariffs on other Asian countries are even more extreme, with China facing a 15 percent tariff, EU countries facing a 35 percent tariff, and India facing a 50 percent tariff. These rates have forced designers to rethink their fabric orders and pricing strategies. For example, designer Grace Ling has had to be more strategic with her fabric orders this season, using a smaller variety than usual to keep costs in check.
Disruption to Fashion Industry
The tariffs have disrupted the fashion industry, particularly for independent designer brands. While established brands with diversified supply chains have been able to alleviate the costs, smaller brands have struggled to adapt. The changing tariff rates and schedules have made it difficult for designers to plan ahead, and the printing of collection deliveries has forced some to rethink pricing and wholesale relationships.
Impact on Pricing and Wholesale Relationships
The tariffs have most clearly influenced how successfully fashion brands can price their collections without losing money. If a designer sells to a retailer, they cannot increase prices retrospectively, even if the materials were more expensive than planned due to the tariffs. This has put pressure on designers to absorb the increased costs or risk losing money on their sales. As a result, many designers are being forced to rethink their pricing strategies and wholesale relationships in order to stay afloat.
