NEW YORK (AP) — As the back-to-school season approaches, U.S. families may face a significant increase in costs for children's clothing and footwear due to the tariffs imposed by President Donald Trump on various imports. The American Apparel & Footwear Association highlights that approximately 97% of clothes and shoes sold in the U.S. are sourced from overseas, particularly from Asian countries.
Under Trump's tariff policy, which aims to penalize countries for trade imbalances, various import tax rates have been set, with tariffs on Chinese goods reaching a substantial 54%. Countries like Vietnam and Cambodia face rates of 46% and 49%, respectively, while Bangladesh and Indonesia are subject to tariffs of 37% and 32%. These increased costs are not easily absorbed by American retailers or overseas suppliers, stressing that options for sourcing from other countries are limited due to similar high tariffs in India, Indonesia, Pakistan, and Sri Lanka.
Steve Lamar, president and CEO of the American Apparel & Footwear Association, noted that if these tariffs remain in place, the burden will inevitably transfer to consumers, resulting in higher prices for everyday apparel. The Footwear Distributors and Retailers of America (FDRA) has also projected sharp price increases for imported footwear. For instance, work boots currently priced at $77 would rise to approximately $115, while running shoes from Vietnam could cost consumers $220 instead of the current $155. A rise in the price of children’s shoes from $26 to $41 has also been projected for the upcoming shopping season.
The imposition of these tariffs has caught U.S. retailers and brands off guard. Leading companies, including Nike, Gap Inc., and Ralph Lauren, had begun diversifying their production away from China prior to Trump's presidency due to ongoing trade tensions and ethical considerations. After the introduction of tariffs in 2018, many brands accelerated their move to other Asian countries for production. For example, Lululemon reported that nearly 40% of its sportswear was sourced from Vietnam last year, significantly reducing reliance on China.
Despite the shift, industry experts argue that re-establishing domestic garment manufacturing in the U.S. would be a costly and time-consuming endeavor. Presently, there are about 85,000 individuals employed in U.S. apparel manufacturing, a substantial decline from 139,000 in January 2015. Moreover, the U.S. lacks domestic suppliers for over 70 materials necessary for shoe production, emphasizing the challenges faced by footwear manufacturers regarding U.S.-based production capabilities.
Historically, clothing prices in the U.S. have remained stable for over three decades, with the Bureau of Labor Statistics reporting that clothing costs in 2024 are comparable to those in 1994. Economists and analysts credit this stability to free trade agreements and competition among discount retailers. However, the recent surge in costs across other consumer goods may sensitize shoppers to forthcoming increases in clothing prices, forcing them to be more cautious in their purchasing behavior.
The impact of the tariffs appears uneven across the retail landscape. According to a report by Barclays, retailers with substantial negotiating power, such as off-price retailers like Burlington and Ross Stores, may fare better than those with less pricing power and high dependence on Asian imports, like Gap Inc. and Urban Outfitters. Meanwhile, secondhand clothing retailers like ThredUp welcome the changes to import exemptions, as the elimination of a duty-free status for low-cost goods from China is likely to affect the market for cheaply produced clothing adversely.
Industry analysts warn that these tariffs could function as a de facto sales tax on consumers, widening the economic gap between wealthier consumers and those with middle to lower incomes. As the rate of apparel tariffs increases, questions arise about where U.S. consumers will source their clothing. Analysts joke about the potential necessity of Americans crafting their clothes, reflecting the extent of the impact on everyday purchasing behavior in light of new tariff regulations.
