What: Trump's tariff policies trigger unprecedented restructuring of global fashion retail supply chains and consumer behaviour.

Why it is important: This restructuring represents the largest coordinated impact on fashion retail in recent history, affecting everything from sourcing strategies to consumer behavior, with BCG projecting USD 640 billion in additional import costs reshaping the industry's future.

Summary: President Trump's recent trade policies have catalysed a fundamental transformation in the fashion industry's operational landscape. The implementation of a 25% tariff on Mexican and Canadian imports, coupled with additional duties on Chinese goods, has forced fashion companies to radically rethink their supply chain strategies. This shift is particularly evident in the industry's response, with companies implementing "Trump Majeure" clauses and exploring alternative manufacturing locations. The impact extends beyond operational considerations, triggering significant consumer behavior changes, with 84% of Canadians actively reconsidering their purchasing strategies and U.S. consumer confidence showing its sharpest decline since 2021. The elimination of the USD 800 de minimis rule has affected 4 million daily shipments, particularly impacting e-commerce giants and forcing traditional retailers to adapt their business models. Major players like Shein are responding by offering substantial incentives to relocate manufacturing, while established retailers like Macy's accelerate their store optimisation plans. This complex interplay of trade policies, consumer responses, and industry adaptation signals a historic reshaping of global fashion retail dynamics.

IADS Notes: The global fashion retail landscape has undergone significant transformation since early 2025, driven by Trump's sweeping tariff policies. As reported in January 2025, BCG's projection of USD 640 billion in additional US import costs catalysed widespread supply chain restructuring. This shift gained momentum in February 2025 when Shein offered 30% higher procurement prices to relocate Chinese manufacturing to Vietnam, while the elimination of the USD 800 de minimis rule affected 4 million daily shipments. The impact extended beyond operations to consumer behavior, with March 2025 data showing 84% of Canadians pivoting towards domestic brands. The industry's response has been multifaceted, from Macy's accelerated store optimisation to the widespread adoption of "Trump Majeure" clauses. The beauty sector particularly exemplifies these challenges, with January 2025 reports showing disruption across 25,000 mass-market products.

How a global trade war could rewire the way fashion operates