Retail and fashion industry trade bodies and experts warn supply chains are set to be thrust into chaos as US President Donald Trump announces a fresh set of rules around tariffs.

Trump announced his policy around Reciprocal Trade and Tariffs yesterday (13 February) which see his trade advisers directed to come up with new tariffs on a country-by-country basis in retaliation to levies, regulations and subsidies he sees as “unfair”.

In an address from the Oval Office, Trump indicated trading partners including Brazil, India, Japan, Canada and the EU were at risk of being hit by extra tariffs.

GlobalData retail analyst Neil Saunders tells Just Style exclusively: “As the review is sweeping, there is now no safe ground for those making goods outside of the US and importing them.”

He explains: “While there are no new tariffs for the moment, President Trump’s request for a review of trade puts the world on notice that more tariffs could well be coming and that more countries are going to be targeted.” 

Earlier Trump slapped a 10% additional tariff on China imports along with a new 25% tax on goods coming from Canada and Mexico. He later announced a pause on the Canada and Mexico tariffs, after the two responded with retaliatory tariffs.

Trump believes the move will push partner countries that want to avert tariffs to set up manufacturing hubs in the US which will increase jobs for Americans.

But he warned in the “short-term” prices of goods could go up.

A White House official said reciprocal tariffs could be imposed as early as 2 April.

Saunders warns that it is possible countries like Vietnam and India could be dragged into a trade war which he says would be “unfortunate” for those fashion brands that have manufacturing capacity in the countries. 

He continues: “While brands can shift where they make things, this becomes a bit like a game of cat and mouse when so many countries are potentially in the firing line.”

US retail and fashion sectors fear more tariffs will have a negative impact on trade 

The US’s National Retail Federation (NRF) says the sector should brace for the impact of the announcement.

The NRF’s executive vice president of government relations David French explains: “While we support the president’s efforts to reduce trade barriers and imbalances, this scale of undertaking is massive and will be extremely disruptive to our supply chains.

“It will likely result in higher prices for hardworking American families and will erode household spending power. We encourage the president to seek coordination and collaboration with our trading partners and bring stability to our supply chains and family budgets.

“The University of Michigan monthly consumer sentiment index continues to decline, suggesting consumers are alarmed about trade war uncertainty.”

Meanwhile,  American Apparel and Footwear Association (AAFA) president and CEO Steve Lamar says he appreciates the goal behind the new ‘Fair and Reciprocal Plan’ is to lower foreign tariff and non-tariff trade barriers.

“We are pleased that President Trump has ordered a comprehensive review of such foreign policies.”

But the AAFA remains concerned the “tariff-heavy approach” continues to gamble with US economic prosperity and is based on incomplete thinking about the vital role ethical and fairly traded imports play in the prosperity.

“Putting America first means ensuring predictability for American businesses that create US jobs; affordable options for American consumers who power our economy; opportunities for farmers who feed our families; and support for tens of millions of US workers whose trade dependent jobs make our factories, our stores, our warehouses, and our offices function. Sweeping new tariffs — a possible outcome of this exercise — instead puts America last, raising costs for American manufacturers for critical inputs and materials, closing key markets for American farmers, and raising prices for hardworking American families.

“We look forward to participating in this review and working with the Administration and Congress — which has the Constitutional prerogative to set tariff policy — to share our perspectives to fashion an approach that truly advances US economic interests.”

Understanding the history and benefit of tariffs 

University of Delaware professor of fashion and apparel studies, Dr Sheng Lu tells Just Style: “In general, tariffs are mainly imposed to protect domestic industries from foreign competition, followed by collecting tax revenues.” 

He continues: “Each country has its own priority industries to protect and may want to promote the export of certain products too. Therefore, like everybody else, the US imposes relatively lower tariffs on many products, such as agricultural goods, cars, and medical devices, while applying higher tariffs on import-sensitive items such as textiles and apparel.”

Dr Lu points out that according to the World Trade Organization (WTO), in 2024, the US imposed an average tariff of 11.6% on apparel imports, with some products being subject to a maximum tariff rate of 32%. In comparison, the EU and Japan imposed a lower average tariff of 11.5% and 9.2% on apparel, respectively, and the highest rate was also capped at around 12%. Thus, if Trump’s reciprocal tariff targets the EU and Japan, theoretically, there should not be a tariff increase for apparel items. 

However, he adds: “This does not necessarily mean that US fashion companies are immune to the tariff increase. One tricky situation is that most leading apparel suppliers to the US market, including China (16.1%), Vietnam (19%), and India (37.4%), set an even higher tariff rate for apparel products than the US. 

“The US domestic textile industry also persistently calls for imposing higher tariffs on apparel imports from Asia to “level the playing field” and reduce the US trade deficit. 

“Additionally, the retaliatory measures taken by US trading partners could significantly hurt bilateral trade relationships and create a more turbulent trading environment.”

In contrast, Saunders remains optimistic that Trump’s threat of reciprocal tariffs is “largely about negotiation for President Trump”.

He states: “Trump probably will not impose tariffs if other countries liberalise their access to US firms. As such, a lot depends on the reactions of other nations, and many are now reviewing trade policies.