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.
Yeah, if they aren't earning money they expect to in a major market, they could react in ways that will affect consumers elsewhere... This conversation really underscored that fashion (like many industries) really is global and I don't see how you undo that at all with any benefit.
This makes me think of how I and many others living near the northern US border in cities like Seattle, Detroit, Buffalo etc. will increasingly go across to cities like Toronto and Vancouver to do luxury shopping. It already happens quite a bit due to the dollar's strength, and these tariffs will send a lot of folks to Canadian luxury storefronts and high-end dept. stores like Holt Renfrew.
You bet! It's a win-win for Americans to shop in Canada (better exchange rate, tariffs). Toronto and Vancouver have increasingly higher numbers of standalone luxury stores (LV, Chanel, Dior, etc.) too. I wonder if this trend will continue?
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.
I wonder how his tariffs will affect the lower priced brands like Shein and Temu. A big reason for their growth was loopholes on low priced goods, if everything goes up across the board they won’t be able to offer $7 dresses anymore.
Right... it will be interesting to see. I think the market for that stuff could expand because people could be priced out of the next tier up. That said, the people already buying it because that's what they can afford will probably continue to do so -- maybe they'll buy a little less of it.
Isn’t that a good thing? With all of this talk of sustainability vs fast fashion, it does seem like this could be at least the start of an answer to those problems. Yes countries like the US may lack the production capabilities they once had, but could it not be possible to recreate them? To redevelop the skills and knowledge that once came part and parcel with fashion design? Objectively, to me (not an American) it seems like a decent way to promote sustainability within the industry.
Part of me thinks that there is no way his advisers will let him raise tariffs as much as he wants to, but then again ... you never know. I'm concerned for the smaller and mid-size brands, the workers, and the consumers who will struggle to afford to clothe and buy materials for their children for the school years. An extra $2,600 per year as a result of these tariffs is a lot!
Thank you for this. The people that voted for him have no idea about the finer details...but boy do they want flashy handbags! It will be interesting to see the fallout.
Tariffs protect local industry. They are not a "tax" on consumers. To frame them in that way requires a bit of mental acrobatics. Tariffs mean businesses based in the USA, providing employment to citizens and paying taxes to your govt, get protected from industries based overseas who have radically different production costs. Offshore clothing manufacturing industries notoriously pay their employees very low wages and offer poor working conditions.
I lost my own work in the clothing industry way back in the 1990s as the industry globalised and relocated to third world countries. If you are paying $7 for a dress has anyone wondered what the person who laboured behind the sewing machine got paid? I sent a letter to the USA yesterday (from Australia) which cost Aus$13.50. So I wonder how can these overseas clothing manufacturers pay for the fabric, get it cut, sewed and packaged then send it half away around the world and still make a profit? Who is really paying for all this? Does any of this really matter so long as some people get the thrill of a cheap garment?
We don't have enough domestic manufacturing to have an industry to protect, thanks to NAFTA enacted in the 90s as you mentioned. (Dana Thomas' book "Fashionopolis" talks a lot about the effects of this on the domestic fashion industry, which is why ours was decimated, ergo, not much to "protect" with tariffs on foreign goods.) Tariffs are, in fact, a tax on consumers, because as Amy's article explained, companies don't pay the tariffs — they roll that amount into the COGS and the end consumer pays for it. Saying otherwise, or somehow justifying this as a "good" for sustainability is incredibly short-sighted. AND, since we have minimal domestic production for the reasons above, we rely on overseas manufacturing even for raw goods. As you asked, who pays for all this? We do. When we place it on the counter and the salesperson rings us up. Even if things were made locally (in the USA), we would not be able to compete with the lower wages paid overseas, especially when Trump's policies want to deport our immigrant work-force.
Thankyou for taking a few minutes to respond to my comment – but I still disagree that a tariff is the same as a tax! My definition of a tax is a mandatory payment or charge collected by local, state, and federal governments from individuals or businesses to cover the costs of general government services, goods, and activities. A tariff is a levy on goods and services that are produced offshore. They are applied for different reasons and outcomes.
From what Amy wrote I get the impression anything potentially increasing the cost of fashion products is regarded as a bad thing. Whether it is a tax or a tariff, or any other factor, the desire is to keep fashion products costing as little as possible.
When you say your President elect wants to deport "our immigrant workforce" I presume you refer to people without work permits or citizenship and that it is a bad thing to send them back to the countries where they came? That it is a good thing they are prepared to work for very low wages, cheaper than what citizens would want to be paid?
I joined this Substack today because I’m intrigued by all sorts of things about the fashion industry that Amy examines. Particularly the concept of “luxury goods” and the drive to collect them. However I'm not a person who buys designer clothes or goods, I'm just interested in the people who do and how they think.
I think this is semantics. If it's not a "tax" it's still another line-item being added to the cost of a good that the consumer will pay in the end. The "mandatory payment" will be factored into the pricing. Fashion is already expensive and Amy's point is that since brands in the last 10-15 have already sharply increased their pricing, the projected stance of the Trump administration will require a rebalancing or brands will not make sales.
I'm not going to get into the moralities and nuances of immigration here, and I resent the implication that you think I think illegal immigration ought to be celebrated. To be clear, I don't think that. I live in California; our immigrant population is what keeps our state functioning for better or worse. This is actually the case throughout America. The reality is yes, we have immigrants here illegally that are fleeing their homelands due to persecution, violence, drug cartels, political unrest — all of these reasons and more. It's also because however low the wages here, they make more money in the US than the do in their homeland. You're suggesting trying to find a better, safer, more-stable life elsewhere is a bad thing? And that we should simply "send them back" when they are a part of our economy? This is shortsighted.
Yes, unfortunately since they don't have sponsored work visas this low wage work is the work they end up getting. The reality is also that citizens usually will not accept these kind of low-wage labor jobs. This has always been true. The cost of goods depends on low wage workers; when they are gone (deported), the labor will be scarce and those that step into the roles will yes, demand more money for the labor (ostensibly because they do have work visas or are citizens). Therefore the costs of goods will go up.
This is basic economics not a political stance, and the same applies for a head of lettuce or a luxury handbag. People voted for Trump claiming he would help the economy with tariffs and deportations of immigrants. Both of these will increase prices, not decrease them.
Glad you brought up how the industry has been pushing prices to the max, and that post-2021 shopping boom has since stalled out. There isn't a whole lot of wiggle room anymore.
As a retail employee who sells non essential goods, I agree. This holiday season might be a good paycheck for me, but I’m not counting on it continuing.
I think the impact on nascent brands is a salient point to surface. Businesses with scale can weather higher tariffs due to their ability to recover substantial revenue on razor-thin margins, but small players need wider margins to grow and reinvest without saddling themselves with debt. Tariffs on foreign products and the commensurate price increases will spur less experimentation among consumers, who will go for tried-and-true brands and/or mass-market players to the detriment of those in the middle. It's especially concerning when considering the impact of diversity in the industry.
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.
Yeah, if they aren't earning money they expect to in a major market, they could react in ways that will affect consumers elsewhere... This conversation really underscored that fashion (like many industries) really is global and I don't see how you undo that at all with any benefit.
Yup. We're in the US's splash zone. If the US sneezes, Canada gets a cold. This is true of lots of other markets globally. The US is a big player.
This makes me think of how I and many others living near the northern US border in cities like Seattle, Detroit, Buffalo etc. will increasingly go across to cities like Toronto and Vancouver to do luxury shopping. It already happens quite a bit due to the dollar's strength, and these tariffs will send a lot of folks to Canadian luxury storefronts and high-end dept. stores like Holt Renfrew.
You bet! It's a win-win for Americans to shop in Canada (better exchange rate, tariffs). Toronto and Vancouver have increasingly higher numbers of standalone luxury stores (LV, Chanel, Dior, etc.) too. I wonder if this trend will continue?
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.
I wonder how his tariffs will affect the lower priced brands like Shein and Temu. A big reason for their growth was loopholes on low priced goods, if everything goes up across the board they won’t be able to offer $7 dresses anymore.
Right... it will be interesting to see. I think the market for that stuff could expand because people could be priced out of the next tier up. That said, the people already buying it because that's what they can afford will probably continue to do so -- maybe they'll buy a little less of it.
Isn’t that a good thing? With all of this talk of sustainability vs fast fashion, it does seem like this could be at least the start of an answer to those problems. Yes countries like the US may lack the production capabilities they once had, but could it not be possible to recreate them? To redevelop the skills and knowledge that once came part and parcel with fashion design? Objectively, to me (not an American) it seems like a decent way to promote sustainability within the industry.
Part of me thinks that there is no way his advisers will let him raise tariffs as much as he wants to, but then again ... you never know. I'm concerned for the smaller and mid-size brands, the workers, and the consumers who will struggle to afford to clothe and buy materials for their children for the school years. An extra $2,600 per year as a result of these tariffs is a lot!
Thank you for this. The people that voted for him have no idea about the finer details...but boy do they want flashy handbags! It will be interesting to see the fallout.
Annie Wilson, are you from SF by any chance?
Yes - you can probably see from my Substack! ;-)
Tariffs protect local industry. They are not a "tax" on consumers. To frame them in that way requires a bit of mental acrobatics. Tariffs mean businesses based in the USA, providing employment to citizens and paying taxes to your govt, get protected from industries based overseas who have radically different production costs. Offshore clothing manufacturing industries notoriously pay their employees very low wages and offer poor working conditions.
I lost my own work in the clothing industry way back in the 1990s as the industry globalised and relocated to third world countries. If you are paying $7 for a dress has anyone wondered what the person who laboured behind the sewing machine got paid? I sent a letter to the USA yesterday (from Australia) which cost Aus$13.50. So I wonder how can these overseas clothing manufacturers pay for the fabric, get it cut, sewed and packaged then send it half away around the world and still make a profit? Who is really paying for all this? Does any of this really matter so long as some people get the thrill of a cheap garment?
We don't have enough domestic manufacturing to have an industry to protect, thanks to NAFTA enacted in the 90s as you mentioned. (Dana Thomas' book "Fashionopolis" talks a lot about the effects of this on the domestic fashion industry, which is why ours was decimated, ergo, not much to "protect" with tariffs on foreign goods.) Tariffs are, in fact, a tax on consumers, because as Amy's article explained, companies don't pay the tariffs — they roll that amount into the COGS and the end consumer pays for it. Saying otherwise, or somehow justifying this as a "good" for sustainability is incredibly short-sighted. AND, since we have minimal domestic production for the reasons above, we rely on overseas manufacturing even for raw goods. As you asked, who pays for all this? We do. When we place it on the counter and the salesperson rings us up. Even if things were made locally (in the USA), we would not be able to compete with the lower wages paid overseas, especially when Trump's policies want to deport our immigrant work-force.
Thankyou for taking a few minutes to respond to my comment – but I still disagree that a tariff is the same as a tax! My definition of a tax is a mandatory payment or charge collected by local, state, and federal governments from individuals or businesses to cover the costs of general government services, goods, and activities. A tariff is a levy on goods and services that are produced offshore. They are applied for different reasons and outcomes.
From what Amy wrote I get the impression anything potentially increasing the cost of fashion products is regarded as a bad thing. Whether it is a tax or a tariff, or any other factor, the desire is to keep fashion products costing as little as possible.
When you say your President elect wants to deport "our immigrant workforce" I presume you refer to people without work permits or citizenship and that it is a bad thing to send them back to the countries where they came? That it is a good thing they are prepared to work for very low wages, cheaper than what citizens would want to be paid?
I joined this Substack today because I’m intrigued by all sorts of things about the fashion industry that Amy examines. Particularly the concept of “luxury goods” and the drive to collect them. However I'm not a person who buys designer clothes or goods, I'm just interested in the people who do and how they think.
I think this is semantics. If it's not a "tax" it's still another line-item being added to the cost of a good that the consumer will pay in the end. The "mandatory payment" will be factored into the pricing. Fashion is already expensive and Amy's point is that since brands in the last 10-15 have already sharply increased their pricing, the projected stance of the Trump administration will require a rebalancing or brands will not make sales.
I'm not going to get into the moralities and nuances of immigration here, and I resent the implication that you think I think illegal immigration ought to be celebrated. To be clear, I don't think that. I live in California; our immigrant population is what keeps our state functioning for better or worse. This is actually the case throughout America. The reality is yes, we have immigrants here illegally that are fleeing their homelands due to persecution, violence, drug cartels, political unrest — all of these reasons and more. It's also because however low the wages here, they make more money in the US than the do in their homeland. You're suggesting trying to find a better, safer, more-stable life elsewhere is a bad thing? And that we should simply "send them back" when they are a part of our economy? This is shortsighted.
Yes, unfortunately since they don't have sponsored work visas this low wage work is the work they end up getting. The reality is also that citizens usually will not accept these kind of low-wage labor jobs. This has always been true. The cost of goods depends on low wage workers; when they are gone (deported), the labor will be scarce and those that step into the roles will yes, demand more money for the labor (ostensibly because they do have work visas or are citizens). Therefore the costs of goods will go up.
This is basic economics not a political stance, and the same applies for a head of lettuce or a luxury handbag. People voted for Trump claiming he would help the economy with tariffs and deportations of immigrants. Both of these will increase prices, not decrease them.
I went out and bought four pairs of Uniqlo tights because of this post 😂
Glad you brought up how the industry has been pushing prices to the max, and that post-2021 shopping boom has since stalled out. There isn't a whole lot of wiggle room anymore.
As a retail employee who sells non essential goods, I agree. This holiday season might be a good paycheck for me, but I’m not counting on it continuing.
I think the impact on nascent brands is a salient point to surface. Businesses with scale can weather higher tariffs due to their ability to recover substantial revenue on razor-thin margins, but small players need wider margins to grow and reinvest without saddling themselves with debt. Tariffs on foreign products and the commensurate price increases will spur less experimentation among consumers, who will go for tried-and-true brands and/or mass-market players to the detriment of those in the middle. It's especially concerning when considering the impact of diversity in the industry.