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In April, fashion brands and manufacturers marked their diaries for 9 July: the day the US administration would enact confirmed global tariff rates, ending months of uncertainty.
Turns out, the duties and timelines are far more up in the air than the industry had hoped.
The tariffs will now be enacted on 1 August, officials announced on 6 July. If countries don’t strike a deal with the US by then, import tariffs will be applied either at the rates set out on 2 April (which were paused following intense backlash), or updated rates set out this week in letters to global leaders.
In the week leading up to 9 July, news of country-specific deals began to trickle in. On 2 July, Trump said he had signed an agreement with Vietnam, stating that US goods would enter Vietnamese borders duty-free, in exchange for a 20 per cent tariff on Vietnamese goods entering the US. This falls below the 46 per cent tariffs that the president imposed on the country in April. China tariffs will remain at 55 per cent, as announced on 11 June and confirmed on 9 July. (American goods entering China will be taxed 10 per cent, also in line with last month’s agreement.)
After negotiations, President Trump announced that China tariffs will land at 55 per cent. But does this actually offer a path forward?
Also on 2 July, Trump threatened to increase tariffs on Japan between 30 and 35 per cent — well above the 24 per cent tariff proposed in April. But on 7 July, Trump revealed via social media platform Truth Social that the rate for Japan will be set at 25 per cent from 1 August, sharing a screenshot of a letter sent to Japanese Prime Minister Shigeru Ishiba. A similar letter was sent to South Korean President Lee Jae-myung, also setting its rate at 25 per cent. Both said they would seek to renegotiate.
Later that day, 14 more letters were sent to global leaders, announcing tariff rates of up to 40 per cent (Laos and Myanmar are facing this top-end tax). Southeast Asian countries with manufacturing hubs — including Indonesia, Cambodia and Thailand — are subject to duties ranging up to 36 per cent (for Cambodia). In the letters, Trump encouraged each country to consider manufacturing within the US to avoid incurring the additional costs.
All will come into effect in August, as more announcements are expected. EU negotiations, for instance, are still ongoing. Trump has also newly threatened countries that align themselves with what he called the “anti-American” policies of the BRIC nations (core members include Brazil, Russia, India, China and South Africa), with an additional 10 per cent tariff — though he did not provide further details.
US Treasury Secretary Scott Bessent said 1 August was not a new deadline for negotiations. However, both the Trump administration and various global leaders have intimated that discussions are still underway. This includes those with tariffs not yet announced, as well as nations who wish to renegotiate their levies. “If they call with a different offer, and if I like it, we’ll do it,” Trump told reporters on Monday. Adding to the confusion, Trump said that evening that the new 1 August deadline is “firm, but not 100 per cent firm”.
With the deadline currently pushed back until then, and no guarantee that rates won’t shift upon further negotiation, there remains little certainty for brands, retailers and manufacturers alike. As brands have seen time and time again, rates and agreements can change fast. With almost a month until global tariff rates will come into play, there’s the possibility of further changes.
“Since ‘Liberation Day’, American businesses and consumers have been navigating a shifting and unpredictable trade landscape,” says Steve Lamar, president and CEO of the American Apparel and Footwear Association (AAFA). “While [Monday’s] delay offers some short-term relief, the letters announcing unsustainable tariff rates on some of our industry’s most important trade partners delivered another blow to American businesses.”
Brands that had hoped to action any supply chain or manufacturing shifts upon the announcement may have to wait. “The latest changes mean there is no clarity,” says Neil Saunders, managing director and retail analyst at Globaldata. “They make it extremely hard for retailers and brands to plan as the tariff rates and deadlines keep changing. What most companies want is a settled state for tariffs, that way they can determine manufacturing and sourcing location and work out costs. Most are not in that position right now.”
Certain countries seem to have relatively set deals, Saunders says, pointing to Vietnam’s 20 per cent tariff, agreed upon prior to this week’s deadline. “This provides some islands of certainty, and a lot of brands will cling to them,” he adds.
The messaging has also been tough to follow, AAFA’s Lamar says. “With the back-to-school season already underway, and with 3.6 million American workers depending on this industry, we urgently need clear guidance and detailed information, not just social media posts,” he explains.
The broader implications for US retail are stark. At the start of the year, market research firm Emarketer projected 2.9 per cent year-on-year growth, according to retail and e-commerce analyst Zak Stambor. They’ve since rounded that outlook down to 1.5 per cent. “That kind of deceleration — especially after a strong start to the year — is significant,” he says. “And with the rising likelihood of additional tariff increases later this year, the drag on retail sales growth could become even more pronounced.” The longer tariff policies remain unsolved, he adds, the more likely it is that retailers will encounter broader headwinds deep into 2025.
In the AAFA’s view, what’s needed now is clarity and speed. “Ongoing tariff threats are slowing decision-making, increasing costs, and adding risk for American businesses and families alike,” Lamar says. “We are urging the administration and our trading partners to stay focused on negotiating and finalising these trade agreements.”
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