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The threat of President Trump’s import tariffs is weighing heavily on Assisi Garments. The organic cotton manufacturer, which is based in Tamil Nadu, India, provides work and training to vulnerable members of the community, such as widows and single mothers, and uses its profits to fund initiatives including cancer clinics and homes for the elderly. Its biggest brand partner, Kooshoo, which makes plastic-free hair accessories, makes 80 per cent of its sales in the US.
Tariffs could lead to increased costs, reduced sales and — in the worst-case scenario — reduced orders. “If our clients decrease the volume of orders, it will be difficult for us to give work to people in the locality,” says Sister Resmi Francis, managing director of Assisi Garments.
Kooshoo has been in dialogue with Assisi since tariffs were announced. “They’re worried,” say co-founders Jesse and Rachel Schiller. “During the pandemic, many of their buyers disappeared. Now, with tariff uncertainty, that fear has returned. If order volumes drop, the human impact will be immediate and far-reaching.”
The White House claims President Trump’s aggressive trade agenda seeks to “address the injustices of global trade, reshore manufacturing, and drive economic growth for the American people”. However, critics warn such a knee-jerk protectionist economic policy could have far-reaching fallout across supply chains, impacting already vulnerable communities and threatening fashion’s attempts at a just transition.
There are many paths open to brands to navigate tariffs that can mitigate social harm, and even build more resilient communities. But will brands heed worries about lost jobs and stalling social progress, or revert to the bottom line?
The sharp end of the trade war
The US is a crucial market for manufacturing regions across Asia, accounting for 19 per cent of Bangladesh’s ready-made garment (RMG) exports from July 2024 to January 2025, 40 per cent of Vietnam’s, and 28 per cent of India’s. America is Cambodia’s largest single-country export destination, representing 40 per cent of total exports — primarily garments, footwear and travel goods.
Key garment-producing regions, including Bangladesh, Cambodia, India, and Vietnam, are all set to be hit with heightened tariffs: Bangladesh at 37 per cent, Cambodia at 49 per cent, India at 26 per cent and Vietnam at 46 per cent. China, meanwhile, faces up to a 245 per cent tariff on imports into the US (including a flat 125 per cent reciprocal tariff, plus additional tariffs on specific goods).
All proposed tariffs, except China’s, are now subject to a 90-day pause, which will end on 8 July. But the prospect of tariffs eroding profit margins may spark reactionary cost-cutting moves, say concerned industry insiders. Reports are already beginning to emerge that some US brands have asked suppliers in Bangladesh to pause shipments, absorb the extra costs, or apply discounts to orders. Bangladesh counts the US (the largest single-country apparel importer in the world) as its main export destination and owes much of its industrial and social development to its RMG sector, which is responsible for more than 80 per cent of export income and employs approximately 4 million workers. It has also become a focal point of garment manufacturing in the last decade, following the Rana Plaza factory collapse in 2013.
China announced 84 per cent retaliatory tariffs on US goods, while the EU passed its own set of tariffs on Wednesday. The trade war bodes badly for fashion.
“Manufacturers are concerned that some buyers may push [them] to reduce the manufacturing cost, which is already at its extreme. We have cut the prices many times, and Bangladesh has one of the cheapest labour markets for apparel manufacturing. If the manufacturers have to bear the brunt of the increased tariffs, businesses will be difficult to run, which will eventually put the lives and livelihoods of workers at risk,” says Abdullah Hil Rakib, former senior vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and managing director of Team Group, which owns five RMG factories.
The knock-on effects may not only come from brand behaviour, Rakib says. “Since the tariffs have been imposed on other apparel-producing countries of the world as well… our concern is declining demand in the American markets in the long run because of rising inflation and high prices.”
A joint statement from the National Garment Workers Federation (NGWF) and United Garment Workers Federation (AGWF) released on 8 April highlighted concerns about Bangladesh’s economy, social progress, and garment workforce in the wake of tariffs, due to its economic reliance on the RMG sector and the volume of garment exports to the US. “This will jeopardise the livelihoods of over 3.5 million female garment workers,” said NGWF president Amirul Haque Amin in the statement.
Continuing the race to the bottom
Compounding potential demands for discounted rates, paused or cancelled shipments, and waning consumer sentiment is another threat: relocation.
Though Trump’s grand vision is “better-paying American jobs making beautiful American-made cars, appliances, and other goods”, mass reshoring appears an unlikely scenario. Fashion brands interviewed by Vogue Business have pointed to the fact that the US simply doesn’t have the breadth of raw materials needed.
Brands are exploring US distribution centres and bonded warehouses to delay duty payments and keep consumers sweet amid tariff chaos. The benefits are big, but costs are high.
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Meanwhile, 61 per cent of respondents to a CNBC survey of 380 people working in or representing the supply chain (including members of the US Chamber of Commerce, the National Association of Manufacturers, Footwear Distributors and Retailers of America, and the American Apparel and Footwear Association) said it would be more cost-effective to relocate supply chains to lower-tariffed countries — which include Cameroon, Malawi, the Philippines and Venezuela — as establishing domestic supply chains would at least double current costs.
Countries such as Ethiopia and Ghana (both tariffed at 10 per cent) are among the African countries brands have been cautiously moving elements of production to in recent years, and could now accelerate, says Dr Hakan Karaosman, associate professor at Cardiff University and co-founder of Fashion’s Responsible Supply Chain Hub (FReSCH).
As yet, brands have not made any indications as to where production could shift on a larger scale, but relocation is certainly rising up the agenda. “Brands are already doing the sums to consider whether the proposed tariffs tip the scales to make some supplier locations more cost-effective than others,” says Anna Bryher, UK policy lead at workers’ rights organisation Labour Behind the Label.
The risks of exiting established manufacturing hubs
Amey Padma, director of trade engagement at Sourcery, a digital trade platform for cotton and other agri-commodities, says there is precedent for tariff-led manufacturing shifts. In 2019, brands including Levi’s and Nike pivoted away from China when Trump increased import tariffs during his first presidency.
But exiting established manufacturing hubs in the name of cutting costs comes with significant drawbacks. “Brands will need to balance cost savings with their commitment to sustainability and social responsibility. In regions where supply chains are less developed, ensuring fair wages, safe working conditions and sustainable practices might be harder to monitor and enforce, putting social and environmental goals at risk. It could compromise the standards that brands have worked hard to establish,” Padma says.
Though a reputational risk for brands, the true human risk is absorbed by the workers who are subject to potentially dangerous, abusive, and illegal working conditions that are enabled by opaque supply chains and weak social and environmental standards.
Without robust planning, training, and investment ahead of any major manufacturing shifts, fashion’s legacy of industrial harm will continue to grow. And what of those left in its wake? “If brands shift production elsewhere, factories will close, jobs will vanish, and communities will be left without pay,” says Bryher.
A just transition under threat?
The threat of tariffs is accelerating the redrawing of the sourcing map. This is bad news for those advocating for a just transition, which is reliant upon long-term investment and brand staying power to fund and catalyse progress in manufacturing regions. “Long-term relationships [with brands] are vital for us in supporting our beneficiaries. Everything is directly related,” says Augustine Jose, manager of Assisi.
A just transition accepts that some dislocation of workers is inevitable as industries decarbonise, but insists that workers are prioritised and involved in decision-making to ensure no one gets left behind. This takes time. Reactionary cut-and-run, cost-led tactics fly in the face of a just transition, cutting workers out of the conversation and leaving suppliers and their dependent communities financially stranded.
The same thinking can and should be applied to tariffs, experts say.
“If you have transitions which are not planned, they can be disorderly, and that’s most likely where workers, communities, businesses, and suppliers, are going to be affected,” says Nick Robins, chair of the Just Transition Finance Lab, which seeks to leverage the financial sector’s role in driving the just transition.
To adhere to the principles of the just transition and support the case for it throughout this turbulent trade period, brands must employ long-term strategies that give the garment workforce agency, experts say. “This is a leadership crisis. It is now fashion’s moral duty to show how the industry can come together to build something resilient for everyone,” says Karaosman. “Transition starts from the people. Brands need to create long-term, holistic strategies.”
The H&M Foundation, which recently published a roadmap to a just transition in Bangladesh, calls upon the industry to collaboratively safeguard hard-won social and environmental gains. “With shifts in trade and tariffs putting progress at risk, especially in sourcing hubs like Bangladesh… we see an urgent need to champion innovations and collaborations that help decarbonise the textile industry while building resilience in communities most exposed to future shocks,” says Fernanda Drumond, head of collective action, H&M Foundation.
Alice Janssens, lecturer in fashion marketing and management at the University of Southampton, sees staying the course as a central pillar of brand equity. For some brands, this means having difficult conversations with customers. US brand Petite Studio wrote an open letter to its customers, outlining that it will be raising prices and explaining that the move will ensure the brand can continue to support and invest in its Chinese supply chain.
Kooshoo has adopted a similar strategy. “We’re holding the line, and we believe customers are looking for that, too. They want transparency,” say the brand’s founders, whether that’s about who makes their products, challenges the brand is facing or even potential price rises. “We’re committed to standing by [our manufacturing partners] through this,” they add.
“Some of the smaller brands who are more focused on transparency are being really quite open about it. It’s part of their value system, and the fact that they’re saying ‘look, we’re figuring this out’ builds a positive relationship with their customer,” says Janssens. Rather than making knee-jerk changes behind the scenes to shield consumers from change, this allows brands to think strategically and forge a path forwards that works for everyone involved, including people in their supply chain.
International retailers are spooked and domestic multi-brands are shifting budgets. Production and material costs are already spiking. Initial tariff impact has been major, and it’s hitting indie brands the hardest.
For those that inevitably do shift at least some of their production to lower-tariffed regions, it can at least be done more responsibly. “Any production shifts should be gradual, collaborative, and grounded in a responsible exit strategy that accounts for the impact on workers’ livelihoods, the likelihood of factory closure, the financial reserve of suppliers, and the need to fund legally required worker severance fees,” says Bryher, recommending that brands proactively join initiatives such as the Severance Guarantee Fund Agreement to ensure that workers are protected in the case of factory closures.
Doing so isn’t just the ethical thing to do, but an exercise in building future-proofed supply chains and long-term business success, says Robins. By paying outstanding wages and benefits, transitioning over the course of at least nine months, and even supporting workers in transitioning into new employment via retaining and job placement, Bryher says brands can ensure they sustain progress as they leave, rather than leaving communities to pick up the pieces with limited resources.
“At this point [fashion’s] needs cannot be about short-term survival but long-term resilience,” says Karaosman. “We have to make sure social and ecological wellbeing is at the heart of this conversation.”
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