Trump Tariffs Disrupt Fashion Supply Chains

On April 2, U.S. President Donald J. Trump announced a new tariff policy, imposing a flat 10% base tariff on all imported goods, along with significantly higher “Reciprocal Tariffs” targeting key trading partners such as China, Vietnam, Japan, and South Korea. This announcement has triggered unprecedented disruption and forced restructuring in the global fashion supply chain, particularly in Asia.

China, Japan, and Vietnam Under Fire — Major Manufacturing Hubs Face Heavy Tariffs

The newly announced tariff rates under the Trump administration are as follows:

China: 34%
Vietnam: 46%
Japan: 24%
Taiwan: 32%
South Korea: 25%

Each of these countries plays a critical role in apparel and fashion manufacturing. Among them, China, Vietnam, and Japan are top exporters of apparel, footwear, and accessories to the United States. Japanese-made bags, shoes, and high-end garments, in particular, remain vital imports for niche luxury brands and boutique buyers.

With most of Asia now under elevated tariff pressure, countries once seen as safer alternatives—such as Vietnam, Indonesia, and Cambodia—are no longer exempt. Michael Yi, CEO of Hong Kong-based sourcing firm MGF Sourcing, commented, “Prices are already rising in Vietnam and Cambodia, and the overall supply chain is under strain.”

Impact on Sportswear and Luxury Brands

One of the categories most affected by the recent tariff hike is sports and activewear brands with production bases in Asia. For example, Nike, Inc. manufactures 50% of its footwear and 28% of its apparel in Vietnam, while Adidas AG sources 39% of its footwear and 18% of its apparel from the country.

David Swartz, an analyst at investment research firm Morningstar, stated, “If the tariffs are expanded, Nike will face significant challenges.” In addition, Nike relies on multiple suppliers in China, where the unprecedented 34% tariff level is expected to weigh heavily on its pricing strategy.

Luxury brands are also likely to face higher import costs for high-quality materials and components sourced from countries like Japan and Italy, potentially forcing them to revise product prices and cost structures.

The Limits of Price Transfers and Setbacks to Sustainability

In the U.S., sneaker prices have already risen by 25% since 2019. According to U.S. market research firm Circana, Inc., the running shoe market has grown 16% since 2021 to reach $7.4 billion, but consumer confidence has dropped to its lowest level since the COVID-19 pandemic. This raises serious concerns that further price hikes may dampen demand.

Simultaneously, tariff-driven cost increases are reportedly pressuring investments in sustainable materials and ethical manufacturing. Industry voices have warned that “initiatives around sustainability may be deprioritized under current cost constraints.”

Japanese Brands Also at Risk

With a 24% additional tariff now placed on Japanese exports, Japanese designer brands and leather goods manufacturers targeting the U.S. market may lose their competitive edge. Japan’s strength lies in its “high-quality, small-quantity” production model, which is ill-suited to the mass-market, low-cost competition—leading to concerns that buyers may hesitate to place future orders.

A Trigger for Structural Change

For the fashion industry, these tariff measures represent more than just a cost increase. They are a trigger for deep structural transformation. In response to this Trump-era trade policy shift, brands must urgently rethink and diversify their production bases, redesign pricing strategies, and strike a new balance with sustainability.