Donald Trump may have won the presidential election, but he has a wardrobe problem. That’s not a fashion statement but an economic reality, writes Gherzi Textil Organization partner Robert P. Antoshak.

The economic costs are daunting. If Trump enacts his proposed trade and fiscal policies, clothing will become more expensive in the United States. During the presidential campaign, he said he’d raise import tariffs, slash income taxes, and boost domestic manufacturing, a volatile formula for higher prices and increased inflation.

Our industry is complex, interconnected, and heavily influenced by the political and economic policies of major economies. With Trump poised to return to the White House, a slew of new policies and priorities will ripple through the industry, causing significant changes. Based on his previous policies, we can anticipate shifts in trade agreements, tariffs, supply chain management, and consumer behaviour.

Here’s a look at how a Trump presidency will likely reshape the global textile and apparel industry:

A renewed focus on “America First” policies

During his first term, Trump’s “America First” approach emphasised prioritising American manufacturing and reducing the country’s dependency on imports. He will likely renew these policies in his second term, significantly impacting the global textile and apparel industry – only this time, these policies will run on steroids. For instance, Trump could incentivise American companies to shift production back to the US, focusing on reducing reliance on countries like China, Vietnam, and Bangladesh for apparel and textile manufacturing.

Such incentives could involve new tax breaks, grants, or other financial incentives for companies that commit to onshoring production. Moreover, for countries heavily reliant on apparel exports to the US, a second Trump presidency could mean reduced orders or new tariffs, making their products less competitive in the American market. This could particularly impact developing economies, such as Bangladesh, which has built its economy around apparel exports.

Trade was a focal point of Trump’s first term, and his stance on tariffs and trade agreements reshaped global supply chains. In his second term, similar measures will continue, only more so, especially regarding China. Expect tariff rates on Chinese merchandise to increase. During the campaign, Trump suggested tariffs could go up to 60%. For everyone else, expect a bump in tariffs of as much as 20%.

Adopting even higher tariffs than those imposed during Trump’s first term (and maintained by Biden during his term) would significantly increase costs for apparel brands that rely on Chinese manufacturing. The original Section 301 tariffs compelled many companies to diversify their sourcing away from Chinese suppliers, benefitting Vietnam, Cambodia, and Bangladesh suppliers. Many Chinese manufacturers also opened operations in these countries, sidestepping the tariffs entirely. A 60% tariff rate would only hyper-charge the redistribution of trade in investment in Asia and throughout the world.

Further, Trump will look to renegotiate trade agreements, potentially revisiting or reinterpreting the United States-Mexico-Canada Agreement (USMCA) and other bilateral deals. This could introduce higher tariffs on imported goods from partner countries, making imported apparel less attractive in the US and pressuring brands to seek US-based production. It is difficult to envision Trump eliminating the yarn-forward rule of origin.

Supply chain shifts and resilience strategies

The pandemic exposed the vulnerabilities in global supply chains, a reality Trump will leverage to advocate for further supply chain restructuring. With renewed tariffs and trade restrictions, brands will further diversify their sourcing beyond China to avoid costly tariffs. This will accelerate the shift to “China Plus One (and More)” strategies, where brands maintain some production in China while also developing manufacturing bases in other countries. Southeast Asia, Latin America, and parts of Africa will see a textile and apparel investment surge as brands try to mitigate risks associated with US-China trade tensions.

Indeed, to reduce lead times and ensure stability, some companies may turn to nearshoring, producing goods closer to their end markets. Given their proximity and trade agreements that could make them more affordable than Asian alternatives, Latin American countries like Mexico and Colombia could become increasingly attractive as production hubs for US-bound goods.

Bringing apparel manufacturing back to the US has its challenges, mainly due to the high cost of labour and, in many cases, a lack of trained workers. Even so, this push will catalyse further investment in automation within the domestic industry. With Trump’s encouragement for domestic production, companies may invest heavily in automation to offset high labour costs in the US. While textile and apparel manufacturing has traditionally been labour-intensive, advancements in robotics, AI, and other automation technologies could make onshore production more viable and efficient. This could lead to significant changes in the manufacturing workforce, reducing dependency on manual labour and shifting the skills needed within the industry. It is possible.

Although Trump will promise job creation through onshoring, automated manufacturing processes would limit the number of new jobs created. The roles that do emerge may require more technical skills, focusing on operating and maintaining automated equipment rather than traditional manufacturing jobs.

Impact on sustainability initiatives

Under Trump’s previous administration, environmental policies were neglected with a focus on deregulation. In his second term, sustainability and environmental initiatives will face renewed challenges. Our industry has faced increasing pressure to adopt sustainable practices, especially in response to consumer demand. However, Trump’s previous stance suggests he will relax environmental standards, potentially allowing more leniency for high-emission practices within the US. This might benefit companies looking to reduce compliance costs. Still, it could also spark a backlash from eco-conscious consumers, potentially hurting brand reputation in certain markets.

Moreover, sustainability is a priority for many consumers, especially younger generations who prefer eco-friendly brands. A Trump administration will deprioritise sustainability measures, but brands that rely on younger demographics may still need to uphold green practices to maintain their customer base. This could create a complex environment where companies weigh regulatory advantages against consumer expectations.

Changing consumer demand and impact on developing markets

Political shifts can influence consumer behaviour, especially in sectors like apparel, where current events highly influence brand perception and consumer loyalty. Trump’s emphasis on American manufacturing could boost the appeal of domestically produced goods, leading consumers to favour “Made in USA” products. This trend may particularly resonate with consumers inclined toward nationalistic values, potentially benefiting brands that pivot to domestic production or highlight their American-made lines.

Economic policies under Trump, such as potential tax cuts, could increase disposable income for certain demographics, potentially boosting spending on discretionary items like apparel. Conversely, any increase in tariffs on imported goods may result in higher consumer prices, reducing demand for foreign-made apparel and driving a preference for affordable, domestic alternatives.

The policies Trump will likely introduce would affect not only US brands and manufacturers but also significantly impact the economies of developing nations that rely on apparel exports. China, Bangladesh, Vietnam, and Cambodia are major global textile and apparel players. A renewed focus on American production or increased tariffs could reduce demand from these countries, potentially hurting their economies. This could force these countries to diversify their export markets or focus on developing their domestic markets to counterbalance the loss of US business.

While Asia may face challenges, other regions, such as Central and South America, could benefit from Trump’s policies. Nearshoring trends would make countries like Mexico, Colombia, and Brazil more appealing as sourcing destinations for the US, allowing them to strengthen their textile and apparel sectors and build a more resilient economy.

So, now what?

Trump’s victory is a significant event. For some, it’s the end of the world; for others, not so much. But regardless of politics, the world has changed.

The second Trump term will introduce complex challenges and opportunities for the global textile and apparel industry. The “America First” approach, emphasis on domestic production, tariff increases, and changes in environmental policy will all contribute to a shifting landscape for brands, manufacturers, and consumers alike. Companies must adapt by reevaluating their supply chains, investing in automation, and balancing consumer expectations with regulatory changes.

For overseas suppliers, some countries will face setbacks, while others will find new opportunities in an evolving market, particularly as nearshoring and diversification take priority. Ultimately, the Trump presidency will prompt the industry to rethink its long-standing practices, reshaping global strategies and redefining the future of textile and apparel production for years to come.

Earlier this week the apparel industry reported mixed feelings on Trump’s win for the US apparel, footwear and retail sectors with a positive reaction for a tax cut but concerns over proposed tariff hikes.

 By Just Style