President Trump has a wardrobe problem

Global and US fashion brands are being urged to look at their upcoming business strategies as Trump in power could change the face of the sector for years to come. Credit: Shutterstock

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... 

During his first term, Trump’s “America First” approach emphasised prioritising US 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%. 

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. 

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. 

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 US 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 US 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. 

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. 

Indeed, according to Dr Keshav Kranthi, ICAC’s chief scientist, such verification and regulation “can be challenging in Asia and Africa because the crop is primarily grown by smallholder farmers”. Globally, smallholders account for more than 99% of production, he stresses.

US Cotton Trust Protocol, which is a voluntary sustainability programme and traceability platform, says the proposed EU green claims directive, which ensures that companies substantiate their claims, will also “have a significant impact” in 2025. It offers quantifiable measurements across six key sustainability metrics:

• Water use 
• Energy efficiency 
• Land use 
• Soil health 
• Soil carbon  
• Greenhouse gas emissions.  

The current demands are “pushing brands and retailers to rethink their supply chains,” it argues, adding that companies will also have to respond to “improved time to market efficiencies.” It adds that to build a “more resilient and responsible cotton industry (…) collaborative partnerships will be essential.”

Trade policy changes

Lu explains today’s fashion business is highly global and relies heavily on the frequent movement of goods and services across borders. Thus, the uncertain and protectionist nature of US trade policy during Trump’s second term could present significant challenges to the fashion industry in 2025.

“Notably, when the 7.5% Section 301 tariff was imposed on selected Chinese clothing products in 2018, the US Consumer Price Index (CPI) growth was relatively low at 1.9%. However, imposing a 20% global tariff, a 60% tariff on Chinese products, and the existing 15-30% regular tariff on clothing when the CPI is historically high is like “adding fuel to the fire,” he says.

While Crietee worries the power imbalance in the apparel supply chain will mean the biggest burden will be placed on manufacturers.

However, Randy Carr, president and CEO of emblem and patch manufacturer World Emblem, believes we will see more nearshoring come into fruition in 2025, noting there are many advantages for brands looking to nearshore operations, specifically faster turnaround times, better quality control, and overall cost savings.

“By relocating production to neighboring countries like Mexico, businesses can reduce transportation costs, shorten lead times, and gain greater oversight of manufacturing processes. Nearshoring has the potential to boost the growth of Mexican manufacturing exports to the US from $455bn today to an estimated $609bn in the next five years, according to Morgan Stanley Research,” he says.

On the other hand, Accenture’s CEO Matt Jeffers states it is important to remember nearshoring will put further pressure on price points and take time to take effect especially in new countries such as those in North Africa.

Lamar sees knowledge and partnership as being key. Companies will need to foster greater collaboration with their supply chain partners as they will be responsible for managing diligence and diverse sourcing programmes.

“Fast changing and comprehensive regulations and an uncertain tariff future (including the likelihood that new US tariffs trigger retaliatory tariffs), will mean supply chain partners need to be increasingly connected with each other and with appropriate government officials so they can both inform those policies while they are being crafted and respond to new policies that take effect.

“Winners in 2025 and beyond will be those who are ready to embrace the challenges, and who can do so while staying focused on delivering to their competitive advantage, whatever that may be,” he shares.