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On 1 August, fashion brands, retailers and manufacturers were once again scrambling to make sense of what are — allegedly — the United States’s final, confirmed tariff rates. After months of delays, these rates were effective as of 7 August, from midnight. (China tariffs, though, were not implemented until 12 August.)
This clarity was meant to come into force on 9 July, the original date on which the US administration was scheduled to enact confirmed global tariff rates. But on 6 July, the Trump administration announced that they would be extending this deadline to 1 August. At the time, officials said that this was not a new deadline for negotiations. But since then, multiple countries have renegotiated their levies. Many countries are still without deals, meaning they will be subject to the administration’s baseline reciprocal tariffs.
Earlier this month, President Donald Trump said that the baseline tariff would fall between 15 and 20 per cent. This is higher than the 10 per cent baseline reciprocal tariff originally announced as part of the President’s ‘Liberation Day’ tariffs. At 8pm ET before the midnight deadline, though, the White House released a new tariff plan, which confirmed that the baseline tariff rate will remain at 10 per cent.
Some final, updated tariff rates are staggeringly high. Syria has one of the highest tariffs at 41 per cent, followed by Laos and Myanmar at 40 per cent; and Switzerland at 39 per cent. The White House also confirmed that President Trump will raise tariffs on Canada from 25 to 35 per cent, as Trump had threatened to do earlier in the day, posting to Truth Social that Canada’s support of Palestinian statehood would impact its trade negotiations.
Even after the deadline, rates continue to change as negotiations continue. As of 7 August, India is now faced with a 50 per cent tariff. After announcing a 25 per cent tariff on the country, Trump doubled the rate, with the extra 25 per cent ‘secondary tariff’ going into effect on 27 August after India failed to negotiate a lower rate. The secondary tariff is a penalty for purchasing Russian oil, in a bid to steer India away from Russian relations. With exemptions made for exports like electronics and pharmaceuticals, the 50 per cent tariff is set to land its biggest blow on the textiles and jewellery industries. Indian officials said that the country would retaliate, further straining the trade relationship between the US and India.
On 21 August, the US and the EU agreed to a trade deal whereby EU imports to the US will be subject to a 15 per cent tariff. “We are grateful to US President Donald Trump, EU President Ursula von der Leyen, and the rest of the negotiating teams for ensuring that the new 15 per cent reciprocal rate is not stacked on top of the existing high most-favoured-nation (MFN) rates that the US fashion industry has long been paying on imports of inputs, equipment and finished goods,” Steve Lamar, CEO of the American Apparel and Footwear Association (AAFA), and CFDA president Steven Kolb said in a joint statement. “We are urging the US to embrace this vital non-stacking concept in other deals so that [the] fashion industry can continue to directly and indirectly support more than 10 million US workers as we design, make, market and sell safe, affordable, authentic and responsibly made clothes, shoes and accessories.”
Fashion is taking a hit. Key manufacturing countries including China, Bangladesh, India and Vietnam are all facing rates at or above 20 per cent. For brands who sought to diversify their supply chains beyond China to alleviate the impact, these also-high levies come as a blow. Some countries, though, are facing lower tariffs than before the updated plan was released (like Bangladesh and Cambodia), offering a slight sense of relief for some businesses.
On 30 July, Trump announced that he had signed an executive order ending the de minimis trade loophole for low-value packages shipped from all countries. The exemption had already been suspended for goods being shipped from China and Hong Kong. All packages under $800 — no matter their country of origin — will now be taxed upon entry, according to the rates for the country of origin. The exemption officially ended on 29 August, but already, foreign post offices had suspended shipping packages to the US as they navigated the new costs and policy.
This means that, after months of uncertainty, speculation and postponed deadlines, prices may start to increase on products in the US, from groceries to gasoline to fashion. These tariff rates — and the repeal of the de minimis loophole — will make it more expensive to ship items and materials into the US, and brands are being forced to adjust to higher costs and slimmer margins. Already, some brands have begun raising prices. According to an analysis by price and market intelligence platform Competitoor, luxury brands have raised handbag prices in the US by an average of 4 per cent year-on-year through 18 July. A Vogue Business analysis from earlier this month found that handbag prices have gone up as high as 12 per cent.
This is expected to hurt sales, as even the industry’s most resilient buyers weigh the market tumult. Ssense cited the ending of the exemption specifically as a challenge that contributed to its filing for bankruptcy protection in August. Bain revised its 2025 luxury outlook to account for tariff-related uncertainty, outlining multiple possible scenarios for the first time since the pandemic.
Brands are bracing for continued impact, staying alert but avoiding any concrete plans or promises. Hermès, which increased prices in May to offset the impact of 10 per cent import tariffs, is waiting to see how things unfold. “We’re waiting for more details… For the moment, we do not foresee any change,” executive chair Axel Dumas told analysts on 30 July regarding the forthcoming 15 per cent levies. Burberry is taking a similar wait-and-see approach. “Tariffs are a headwind, but we spent a lot of last year looking at supply chain and price elasticity,” CFO Kate Ferry said earlier in July. “We took a surgical approach to price increases in the US. It is highly dynamic, so we continue to monitor and manage.”
Adidas CEO Bjørn Gulden said on the company’s earnings call on Wednesday that tariffs have already had a “double-digit euro-million hit” on business. The brand is weighing what the consumer response will be. “What we are most worried about, is what the consumer reaction in the US will be — not just to what our company does, but across the entire market,” he told investors.
On 31 July — the eve of today’s 1 August deadline — Ferragamo’s executive board member Ernesto Greco said that the brand is reservedly optimistic. “As far as we understand, the tariff today should stay at the level of 15 per cent, which includes also the previous tariff that was for us around 9.5 per cent. So the real extra increase in the tariff is workable, with a price increase,” he said, before caveating: “Of course, if the agreement reached by the European Union and the US President remains as we understand today.”
Now in effect, tariffs remain a key concern for fashion businesses in 2025. All respondents in the US Fashion Industry Association’s 2025 Fashion Industry Benchmarking Study said that one of their top business concerns is US trade policy and uncertainty around the impact of President Trump’s tariffs. More than 70 per cent of survey respondents said that the higher tariffs increased sourcing costs, squeezed profit margins and led to higher consumer prices already — and almost half report declining sales and 22 per cent have already laid off employees due to the increased tariffs.
Even so, almost two-thirds of respondents are optimistic about the five-year outlook for the fashion industry. It’s lower than last year, but a sign that a majority of sourcing executives are confident in the industry’s ability to weather the tariff uncertainty.
The article has been updated to reflect that tariffs will come into effect on 7 August, not the 1 August deadline.
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