What: Global trade tensions are forcing fashion retailers to balance sustainability commitments against rising tariff costs, reshaping industry practices and supply chains.

Why it is important: This dual pressure of trade tensions and sustainability requirements is catalysing fundamental changes in retail operations, from sourcing strategies to consumer pricing, potentially reshaping the industry's future.

The fashion industry faces a critical challenge as escalating trade tensions threaten to undermine sustainability commitments. With US President Trump wielding tariffs as a political weapon against both strategic rivals and traditional allies, fashion businesses are grappling with unprecedented uncertainty. Industry experts, including Michelle Gabriel from IE New York College, emphasise that effective strategic planning becomes nearly impossible under such volatile conditions. The impact extends beyond immediate operational concerns, potentially affecting long-term sustainability investments that often lack immediate returns. Environmental nonprofits warn against using tariffs as an excuse to retreat from climate goals, arguing that abandoning sustainability efforts would harm both supply chain workers and brand reputations. Industry leaders, including Colin Browne of Cascale, maintain that sustainability remains non-negotiable despite short-term trade concerns. The situation has prompted some companies to innovate, particularly in areas like artificial intelligence for material efficiency and circular business models, while others focus on practical approaches like factory-level improvements and supply chain optimisation.

IADS Notes: The retail landscape has undergone significant transformation since early 2025, with BCG projecting USD 640 billion in additional US import costs from tariffs. This economic pressure coincides with February 2025's EU regulations mandating retailer-funded textile waste management, while consumer data shows 60% of shoppers expressing increased climate concern despite price sensitivity. The industry's response has been innovative, as demonstrated by Peek & Cloppenburg's January 2025 launch of their sustainable store concept, showing how retailers can balance environmental responsibility with economic viability.

As tariffs cause chaos across fashion’s supply chain, what happens to sustainability?