At New York Fashion Week, Mexican-born brands from Campillo to Heirlome to Sloan showed their collections on-schedule in a bid to cement their presence in the US market.
If President Trump’s proposed tariffs — 25 per cent on Mexico and Canada, on pause as of now — come into play, as China’s 10 per cent tax did on 4 February, their plans could get a whole lot more difficult.
Prior to fashion week, consumers were already concerned about what the proposed tariffs would mean. “Full send on my Ssense cart tonight,” one user wrote on X in response to a post about the 25 per cent tax on Canadian goods that was set to come into effect earlier this month. The Canadian retailer is known for platforming independent brands — so if access to brands on the Ssense site is made more expensive, it will spell trouble for indie designers. (Ssense declined to comment on tariffs and whether or not they would impact prices.)
If the tariffs on Mexico and Canada come to fruition, they will impact a third of all goods shipped into the US, including clothing, footwear and beauty products. And it may not be the end: after the EU floated counteractions against the US’s tariff blitz, Trump signed an executive order on 13 February issuing reciprocal tariffs on all US trade partners. In short, a global trade war could be brewing.
It’s a stressor for both brands and consumers who have grown accustomed to sourcing, selling and buying internationally. And for independent designers — unable to quickly rework their supply chains around tariffs, unlike their larger counterparts — the stakes are even higher.
Nothing to do but wait
At this stage, brands are watching and waiting. “Obviously, we would prefer to operate without tariffs or trade restrictions, but as a small business we have to adapt to the current regulatory environment,” says Stephanie Suberville Rodriguez, co-founder and creative director of Heirlome. The brand is based in New York, but sources and produces some of its garments in Rodriguez’s home country of Mexico. “We’re having conversations with our partners at all levels and will work together to adapt,” she says.
Everyone on the brand and logistics side is at the information-gathering stage, says Sloan founder and creative director Julia Sloan. “We’re starting to discuss potential changes and risks with our suppliers and shipping partners and are attempting to come up with some collaborative and mutually workable solutions,” she says. That said, some suppliers have already told Sloan they will need to raise prices slightly, so the brand is developing plans for what that means for the business.
New York-based Contessa Mills currently manufactures 10 per cent of its clothing in China (80 per cent is domestic; the remaining 10 per cent is made in India). “We have invested a lot of time in building relationships with producers in China, and we want to be mindful of maintaining these because they have been great partners whom we trust,” founder and designer Mills says. That said, she’s also exploring options in India and “other non-tariff impacted countries” to help mitigate costs. Of course, reciprocal tariffs on trade partners could complicate these workarounds.
Because Mills ordered far in advance for current and forthcoming seasons, the brand’s next production orders won’t be for another six months. “Luckily, this gives us more time to assess what we will keep in China and what we may move,” Mills says. “So far, China is so competitive on pricing, even with these tariffs we think they could be our best option for certain styles.”
Given the flip-flopping communications, consumer habits are unlikely to change immediately, says Neil Saunders, managing director of Globaldata’s US retail division. “I am sure that shoppers are a bit confused, but people don’t react to announcements. They react to tangible changes such as prices going up or shipping times becoming elongated,” he says.
Mexico-based designer Patricio Campillo, who just showed at New York Fashion Week (NYFW) under his eponymous brand Campillo, echoes this. “Interestingly, we haven’t heard significant concern from our consumers yet,” he says. “I think many of them will wait to see how things unfold before reacting.”
But it’s been on Campillo’s mind. “I genuinely hope the tariffs are not implemented, as we’ve spent years nurturing this market,” he says. “It’s one of the key reasons we’re showcasing our collections at NYFW. The relationship we’ve built with our customers [in the US] is invaluable.”
It’s not just tariffs: the ending of the de minimis shipping exemption that lets shipments under $800 enter the US duty free (which is currently on pause) would take a toll on small businesses. Canadian jewellery designer Kara Yoo is expecting major impact. “For direct-to-consumer (DTC) customers, if de minimis exemptions are removed [their closing is currently paused], we expect that to have a huge impact on sales,” Yoo says. In this case, the brand will move towards a ‘delivery duty paid’ model (wherein the seller is responsible for all costs before the package reaches the buyer), so that consumers are aware of the total cost of each piece upfront.
Wholesale vs DTC
Tariffs would have major implications for brands’ relationships with wholesalers. It’s an especially big concern for independent brands, many of whom rely on wholesalers to gain more exposure to US consumers.
“With wholesale, there’s less flexibility, our margins are very tight as is — and retailers have strict margins and price expectations, so any increase in production costs is a tougher conversation,” Sloan says. “With DTC, we have a bit more control over pricing and storytelling, so we can be transparent with our customers about what’s happening and why.”
Campillo has built strong relationships with his wholesalers, the designer says. Right now, the US makes up about 50 per cent of the brand’s wholesale presence, which Campillo doesn’t want to decrease. Yoo, meanwhile, began producing some products in Thailand last year, and expects US wholesalers to move towards these pieces. Whereas, in the past, they were less desirable as they were subject to 8.5 per cent tariffs for jewellery, she says.
Sourcing costs are another major concern. Heirlome’s sourcing and production is global, including Mexico, Europe, China, Bolivia and India, as well as domestically in New York’s Garment District. The China tariffs have already taken a hit on the silk the company sources and imports from the region. “This is one of the biggest frustrations over tariffs,” Rodriguez says. “We are essentially taxing ourselves on materials that we don’t produce domestically.”
Hard to shake
Whichever tariffs do lock in will render the US a more expensive destination for brands in those countries. But they can’t simply eschew the US market, because of its sheer size, Saunders flags. “I cannot see brands simply giving up on it,” he says. “Tariffs are disruptive to trade; they are not fatal.”
Most of Heirlome’s sales are in the US. Tariffs will likely force the brand to raise prices, Rodriguez says. She also worries about how they’ll impact her overseas aspirations — particularly if retaliatory measures on apparel are taken by the EU, and then reciprocated by the US.
Similarly, 70 per cent of Kara Yoo’s customers are US based. Though she won’t fully remove her brand’s US footprint, she will need to shift attention away from the States, she says. “A lot of how we grow depends on where we’re putting our time and effort,” she adds.
The brand is already pivoting strategy. The US was going to be Kara Yoo’s main focus for growth this year. But now, it’s changing course. “Instead, we’re focusing on increasing our retail within Canada — and in Europe, if they’re the target of US tariffs,” says Yoo. “We’ve already seen a strong shift in perception inside Canada with a ‘Buy Canadian’ movement, so we’re expecting that if there’s a US-EU trade war, that would mean that the European market would open up a lot more for us.”
At this stage, Contessa Mills only sells in the US, but plans to expand internationally as soon as international demand picks up. “We are not deterred at all about growth abroad,” says Mills, noting that the brand is now more mindful, however, of the increasing difficulty of managing a global business.
Campillo is thinking about how to further entrench the brand in the US. “I’m confident that by staying true to our core values and remaining agile, we’ll be able to navigate this challenge and continue to thrive in the US market and beyond,” he says.
Already, the brand is ideating ways to increase the value its customers perceive in Campillo clothing, “ensuring they feel the products are worth every penny”, he adds. “We hope this will help minimise any negative impact.”
But the US stronghold doesn’t mean brands would look to shift away from tariffed regions even if they were able to. Each season, Heirlome patterns with a local artisan in Mexico or Latin America. A 25 per cent tariff on those goods would be a challenge, but it’s one Rodriguez is prepared for, whether that means passing some costs to customers or absorbing some on the brand side.
Sloan is operating with this same ethos. Though most of the brand’s customers are in the US, the designer is committed to her current mode of production. “Producing our pieces with integrity, care and through a community-based lens is at the core of our business, so at this stage I cannot imagine moving from our current set-up,” she says. “The women we produce with and suppliers we source with in Mexico are the heart and soul of the brand.”
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