Trump Won. So Shop Now.
Tariffs, if enacted, would mean higher apparel prices for U.S. consumers.
A week before the presidential election, Columbia Sportswear CEO Timothy Boyle told the Washington Post that if Trump won and enacted his tariffs, “We’re set to raise prices.”
“We’re buying stuff today for delivery next fall. So we’re just going to deal with it and we’ll just raise the prices… It’s going to be very, very difficult to keep products affordable for Americans,” said Boyle. The price hikes would create a cascade of consequences for consumers who buy clothes, which in turn could adversely affect the fashion industry in many ways.
Trump has lied about tariffs and said that foreigners will cover them, when in fact consumers will be the ones to pay those costs. We don’t yet know if Trump will put tariffs in place or exactly what those will look like, but he has a pretty good history of doing what he says he will. Plus, in his first term, he did enact tariffs. He has said that in his upcoming term, he plans 10 to 20 percent tariffs on all imported goods, and tariffs as high as 60 percent on goods from China.
“It's going to be rough,” said Susan Scafidi, founder and director of Fordham’s Fashion Law Institute. “Everything's going to be more expensive, which is a little crazy when you realize that a lot of the Trump appeal was with regard to the economy, and a lot of the reason that the people said they were voting Republican this year was concern about inflation.”
In his first term, Trump’s tariffs, according to one study, cost the average American household an additional $500 per year by the end of 2019. The new tariffs could cost those same households more than $2,600 per year.
I called Scafidi Wednesday afternoon to understand how Trump’s tariffs could impact consumers and the apparel industry, and what else the fashion community can expect from this administration.
Like it or not, another Trump administration is happening. Should we just expect the prices of all of our clothing to increase?
Probably. What Trump has proposed is at least 10 percent [tariffs] across the board. Over 95 percent of clothing and footwear sold in the U.S. is produced overseas. And even the stuff that is produced here is made with fabrics and so forth that are produced overseas. So there's no way that it doesn't become more expensive to produce clothing or to import clothing. The idea of a protective tariff [implemented to protect domestic goods from overseas competition] has been tested and historically not been so great across the board.
But for this industry, a protective tariff is quite the opposite. It's a harmful tariff, both for domestic manufacturers, [though] we have few left; for anyone who is a retailer; and certainly for consumers. In addition to that 10 percent across the board, throw in an additional 60 to 100 percent on Chinese goods. Well, let's think about how much clothing is produced in China. Just check the labels in your closet.
Things haven’t been great for the fashion industry anyway, with earnings mostly decreasing as we end the year. So I wasn’t surprised to see apparel stocks down with the news of Trump’s reelection.
Consumers have cut back. Uncertainty does that to us. And we've had a vastly uncertain few months. It's not great as we start the run-up to the holiday shopping period. Post-pandemic, we all realized that we needed to carry handbags and put on shoes again, and there was a spike in luxury sales. But we've settled away from that, and particularly younger generations of consumers are focusing less on acquiring stuff and more on experiences. Even people who can well afford whatever the price happens to be are experiencing sticker shock, wondering about the value proposition of a $10,000 handbag. A $20 handbag carries your keys just as well as the $10,000 handbag.
Tariffs are going to make it that much harder for people who really need to stretch their budgets to cover the shoes they need to send their kids back to school in the fall. But also, for everybody who thinks of clothing as a discretionary purchase.
And prices of ultra-fast fashion like Shein will also increase.
Exactly. Shein and Temu will be more expensive, but not as expensive as everything else that has also gone up in price. The person who is going to struggle to afford or to justify the purchase of the contemporary price point may trade down to mass brands, which is going to impact contemporary-priced goods, but also things like the environment and working conditions, which are a concern when it comes to fast fashion and mass-market production generally.
You would think perhaps that Trump and his nearest and dearest, having engaged a little bit the fashion industry at earlier points in their careers, would have some sympathy. Trump had his ties at Macy's, Ivanka had her jewelry and her clothes. But they've been so roundly rejected by fashion, and fashion is at least on the surface such a blue-leaning industry. I don't think there's going to be a lot of sympathy. They might just be ready to reject the industry that rejected them.
The last Trump election, designer after designer came forward to say, “I'm not dressing them.” And of course, they responded — Melania by wearing European designers. So we're not even going to get the bump of having a Michelle Obama or even a Vice President Kamala Harris wearing emerging designers and shining a light on the industry.
Jeff Bezos promptly commenced sucking up to Trump on Wednesday. Should we expect that from other industry leaders, like LVMH chief Bernard Arnault?
LVMH, during the Trump administration, opened a factory in Texas, and Trump visited. So I think they were already trying to hedge their bets. They looked at the tariff diplomacy, or lack thereof, and said, We need to get on this guy's good side, and we need to be able to avoid some of this. It's a drop in the bucket in terms of their global production, but I think we'll see more of it.
One of the other big stories here is the FTC under Lina Kahn has been very activist. I don't think Lina Kahn is likely to continue in her current role under the new administration. Amazon has been under investigation from an antitrust perspective, because let's face it, we all buy from Amazon. Certainly Jeff Bezos wants someone running the FTC who is going to let him off the hook.
I don't know if you were up at 2:30 in the morning watching Trump's speech — he went on this long tangent praising Elon Musk. I think Jeff Bezos, et cetera, are clearly looking after their own interests, but I think Trump is very open to that. Trump, whatever the truth of his finances, is himself part of the billionaire boys’ club. And I don't mean the brand — I mean the back rooms with the cigars.
Can you remind us what happened the last time Trump was in office and enacted tariffs?
They were specifically aimed at some things that caused the pain in the industry. So luxury goods got expensive. Handbags from the Kerings and LVMHs of the world got expensive. They had a fairly inelastic demand curve and obviously limited production by design, artificial scarcity. And so those costs were basically absorbed by the consumers. But I don't know how long that will continue.
Would you trace the beginning of these crazy luxury price hikes back to the first Trump tariffs?
Origin questions are always interesting. I certainly think that that played a role.
Fashion may have inadvertently backed itself into a corner by raising prices so much — I don’t see how that can continue, even with tariff pressure.
It has gotten extreme. I do think there is a limit, and there's a limit to how many bags even the hardcore luxury customer will keep in the closet. And again, it becomes a value proposition. You may have the $10,000 sitting around, but do you want to spend it on a bag, especially if it's not feeling creative or desirable in the same way?
Can you talk about how tariffs will affect the counterfeit industry, which fuels human trafficking and forced labor?
I think at this point, it's a bipartisan issue. China and Hong Kong together account for some 85 percent of fashion counterfeits. There might be a little more enforcement. But I think that counterfeits are going to look like a better bargain than ever, which is unfortunate.
Could you foresee a situation where some mid-size or smaller brands just close if their costs go up too much and consumer demand flags as a result?
It wouldn't surprise me. We're already seeing a generation that is embracing vintage in a different way. At the same time, our search costs for vintage have gone way down because it's not just, do you happen to stumble across it in your local mom-and-pop consignment store? It's The RealReal, it's Vestiaire Collective. It's ThredUp, it's Poshmark.
The industry already laments that the consumer buying at retail waits for discounts. So between the embrace of secondhand clothes, and the fact that we've trained consumers to look for discounts, the industry is struggling. When you're not a giant like Shein or Temu with the very bottom in terms of the price hierarchy — and it doesn't matter what your price is, somebody's going to buy the high-end designer at the very top — it's absolutely toughest in the middle.
Can you explain how Trump’s immigration policies might impact the industry?
if you look at the most recent CFDA Awards, the winners in voted-upon categories [versus honorary awards that aren’t voted on] were all immigrants. Up and down the chain of a production, so many immigrants drive this industry. Something that makes the U.S. less immigrant friendly is threatening to our industry. We need people who are willing to accept minimum wages and sit at a sewing machine all day to preserve the little bit of manufacturing we have in New York and California.
It's going to affect the design schools, too. If we create an atmosphere where people from other countries feel like the U.S. is not a friendly nation in terms of coming and paying a lot to go to school and maybe staying, or coming across the border and getting an entry-level job and creating a better life for your family, it's going to squeeze our industry.
If the little bit of garment manufacturing that is happening in the U.S. is being done by immigrants and Trump wants more manufacturing done domestically but also deports immigrants — then what?
Exactly. It doesn't make sense.
The other thing I think we're going to see is a decline in regulation at the federal level. Legislation that has been pending, the FABRIC Act [which would ensure fair pay and safe working conditions for U.S. garment workers] — not going to happen. So anything that is focused on the industry, on sustainability, on climate change and so forth is likely not to move forward. It'll be driven by laws in New York and California.
But those can be effective, right? The move away from fur that went industry-wide started with legislation in California banning new fur sales.
Absolutely. Because California is such an enormous market. That [textile recycling] law was just signed in September [in California], so who knows what it's going to look like. That's gotten in under the wire, in a sense, but we'll see how much more comes forward.
Some fashion companies have implemented DEI programs since 2020, however many have been quietly dismantled. What do you foresee happening with DEI initiatives?
When the Supreme Court cases against Harvard and UNC resolved — the actions were being taken against universities and their admissions programs, but [many thought] the Supreme Court will likely write this in a way that applies to affirmative action in the corporate realm as well. And sure enough, we did see the follow-on lawsuits against law firms and so forth.
I think that fashion DEI programs have kind of flown under the radar, but to the extent that we have activists who will ferret them out and bring actions against programs that they believe are illegal affirmative action in one way or another, certainly Trump judges are going to be sympathetic to those arguments. Corporations are already well advised to be cautious in how they frame their DEI efforts in order not to run afoul of the law that has basically made affirmative action illegal. But I think they'll have to be even more careful going forward. If those programs have any whiff of potentially being challenged, I think that companies may very well step away from them.
What’s your advice for consumers?
Buy now. If you were planning on a fashion splurge, shop now. If you're planning to stock up on socks and t-shirts, shop now — now is the time. Because I think that we’re only going to see prices increase if these things move forward.
This interview has been edited and condensed.
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Tariffs are a tax on US consumers. As a Canadian, my fashion purchases won't be affected by US tariffs, but I do think brands will take the opportunity to raise prices across the board. There is a limit to how much people can absorb, and smart brands should be looking to balance this out.
I’m sure we’ll see even more of a spike in vintage,thrifting and consignment shopping. They too will be able to and likely will raise their prices because they could see demand increase.