Tariffs, Threads, and Unintended Consequences: How the 2025 Trade Policies Are Reshaping Fashion

Let's unravel the complex tapestry of tariffs and their ripple effects on the fashion industry, especially for small businesses and the fast fashion phenomenon.

As a small business owner who proudly makes clothing in America, I’d love to tell you that these new tariffs won’t touch me. But plot twist: they absolutely will—and not in the cute, “support local” kind of way.

Let’s start with the shirt on your back (literally). Fun fact: there are no cotton mills in the U.S. that produce shirt-weight fabrics. Zero. Zilch. Nada. That crisp button-down? The fabric had to be imported. Which means my manufacturer now has to pay more for the materials. And guess who’s next in line? Me. And after me? Yep, you.

And I’m not alone. Most of my peers in the custom clothing world—family-run shops, women-owned businesses, local legends—are also importing key pieces of their products. Not to mention all the unglamorous-but-essential stuff: garment bags, hangers, shipping materials, branding labels. You name it, it’s probably getting hit.

So while the big-box fast fashion empires will absorb the costs and carry on flooding the market, it’s the small, slow, intentional brands that’ll feel the squeeze the hardest.

Small Businesses: The Unsung Casualties

While many supporters of President Trump's 2025 tariff initiatives may not own small businesses, it's these enterprises that are bearing the brunt of the impact. Andrew Chen, founder of the New York-based fashion brand 3sixteen, highlighted the challenges. Business Insider.

"The new tariffs are forcing us to reconsider our pricing and sourcing strategies. With increased costs on materials like Japanese denim, we're faced with either raising prices or absorbing the hit." Business Insider.

This sentiment echoes across the industry, with numerous small retailers grappling with delayed orders and hiring freezes. The National Retail Federation warns of potential job losses and reduced consumer confidence as a result. Reuters. Vouge.

Fast Fashion: A Double-Edged Sword

The proliferation of clothing in today's market is largely driven by the fast fashion model, characterized by rapid production cycles and low-cost garments. Brands like Shein and Temu have thrived by offering an abundance of styles at minimal prices. However, the revocation of the "de minimis" tax exemption, which previously allowed imports under $800 to enter the U.S. duty-free, has disrupted this model. The Associated Press reports. Time.

"The elimination of the exemption imposes a duty of 30% or $25 per item, aiming to curb the flood of cheap foreign goods." AP News.

This move is intended to level the playing field but may lead to increased prices for consumers accustomed to bargain deals.

The Global Supply Chain: Interwoven Dependencies

Even for products labeled "Made in America," the reality is that many components originate from countries now facing high tariffs. Zippers, fabrics, and buttons are often sourced internationally, making domestic manufacturers vulnerable to increased production costs. Reuters highlights the predicament of companies like Day Owl, a backpack maker, which may shut down without tariff relief. Reuter.

Looking Ahead: Navigating the New Normal

As the fashion industry adjusts to these changes, both businesses and consumers must adapt. While the intent behind the tariffs is to bolster domestic manufacturing, the immediate effects suggest a period of turbulence, especially for small businesses and the fast fashion sector. Consumers may need to brace for higher prices and consider the broader implications of their purchasing choices.

In this evolving landscape, staying informed and supporting brands that prioritize ethical and sustainable practices can make a significant difference.