Apparel Wholesalers NAICS 424350

Nov 26, 2025 - Apparel Industry Grapples with Tariff Ripple Effects

• The apparel industry is facing significant disruption from US tariffs, which have sharply increased costs and reshaped sourcing strategies, according to a report in the Business of Fashion (BOF). The BoF–McKinsey State of Fashion 2026 report showed that duties on apparel and footwear imports spiked from 13% to 54% in spring 2025 before easing to 36%, above historical norms. With the US importing 89% of apparel and leather goods, manufacturers are among the hardest hit. Some 76% of fashion executives say tariffs and trade disruptions will be the key factors shaping the industry in 2026. Supply chains are shifting: US imports from Cambodia rose 42% between 2019 to 2024, while imports from China fell 30%. To offset margin pressures, brands are raising prices, renegotiating supplier terms, and streamlining assortments. Manufacturers are diversifying production footprints, with expansions into Vietnam and Kenya, underscoring the need for agility in a volatile trade environment.
• Softening consumer sentiment and confidence in late 2025 reflects a growing weakness in discretionary spending, posing challenges for US apparel wholesalers. The University of Michigan’s Index of Consumer Sentiment dropped 6.2% month-over-month in November's preliminary results to 50.3, a 29.9% year-over-year decline. The Current Economic Conditions Index fell to 52.3, and the Expectations Index to 49, down 36.3% annually. Year-ahead inflation expectations rose to 4.7%, while long-run expectations declined to 3.6%, with increased uncertainty across both horizons. Meanwhile, the Conference Board’s Consumer Confidence Index edged down to 94.6 from 95.6 in October, as improved current conditions (Present Situation Index up to 129.3) were offset by weaker short-term expectations (Expectations Index down to 71.5). Inflation expectations rose to 5.9%, and over half of consumers anticipated higher interest rates. Holiday spending is projected to fall, with promotions driving purchasing decisions.

• According to a Reuters report, US clothing retailers such as Levi’s, Aritzia, and Ralph Lauren are testing full-price strategies amid resilient demand from affluent consumers, who remain largely unaffected by inflation and tariffs. With the wealthiest 10% of Americans now accounting for half of all consumer spending, brands are seeing minimal pushback on higher prices and are reducing reliance on promotions. For the apparel wholesale industry, the shift signals a potential rebalancing of inventory and pricing strategies. Wholesalers may need to prioritize premium product lines, streamline discounting cycles, and align with retailers’ data-driven, region-specific pricing models. The trend also suggests stronger demand forecasting and tighter supply chain coordination to support full-price positioning and margin preservation.
• An expansive bill signed into law by President Trump in July 2025 includes a provision to eliminate the de minimis exemption, heavily used by fast fashion and other e-commerce retailers, according to a report in Supply Chain Drive. The exemption had allowed imports under $800 to enter the US duty and tax free. While the change was slated to go into effect in 2027, the Wall Street Journal said the White House is ending the exemption as early as August 29, 2025. The new bill establishes a civil penalty for anyone trying to use de minimis entry in a way that violates any other provision of US customs law. Earlier this year, Trump had suspended the de minimis exemption for imports from China. The number of shipments entering the US using the exemption in the last four years increased from 637 million to over 1 billion per year.