US President Donald Trump shifted the deadline for tariffs to go into effect to Aug. 1, and turned up the heat with fresh rates and new threats. In some ways, it’s Liberation Day, part two — but fashion needs certainty more than ever.
Any added tariff is going to bring up costs from what they were six months ago. Vietnam, for instance, may be facing a better rate than was feared in April, “it’s still a net increase from where it was,” said Joanna Rangarajan, managing director at retail consultancy Alvarez and Marsal. Likely, athletic footwear brands in particular won’t be able to diversify away from Vietnam, according to UBS.
Tariffs have also exposed other supply chain risks. What capacity will look like as shipping companies temper their own expectations, following a dip after brands rushed to get goods into the US, is one concern, said Michael Prendergast, managing director at Alvarez and Marsal. Geopolitical tension — not just around already unsteady Iran, the Strait of Hormuz and Red Sea — is elevated around other important channels, including the Panama Canal and South China Sea.