What: The US Bureau of Labor Statistics reports the first post-tariff rise in clothing prices, with a 0.4% increase coinciding with broader inflation reaching 2.7%.

Why it is important: This price increase signals the beginning of a broader retail pricing transformation, as retailers can no longer absorb tariff costs internally, leading to a fundamental shift in consumer spending patterns and industry dynamics.

The US retail sector has reached a pivotal moment as apparel prices rose 0.4% between May and June, marking the first increase since Trump's sweeping tariff announcements. This shift comes amid broader inflation concerns, with the overall rate hitting 2.7% annually in June, the highest since February. The impact of these tariffs is becoming increasingly visible as retailers exhaust their pre-tariff inventory and face the reality of higher import costs. Major brands including Nike, Steve Madden, Michael Kors, and Coach are implementing selective price increases, while beauty brands such as E.l.f., Glow Recipe, and the Inkey List have announced USD 1 price hikes. The situation is further complicated by rising fuel and electricity costs, which historically correlate with apparel spending patterns. Despite relatively stable consumer spending thus far, industry experts express concern about future demand, particularly given Amazon's mixed Prime Day performance, where day-one sales dropped 40% year-over-year, though the overall event set records. The retail sector now watches anxiously as back-to-school shopping approaches, providing a crucial test of consumer resilience in the face of rising prices.

IADS Notes: In July 2025, the retail industry is witnessing the first tangible effects of Trump's tariff policies, with apparel prices rising 0.4% month-on-month. This aligns with earlier predictions from March 2025, when experts projected price increases of 1 to 1.5% across retail categories. The impact varies significantly by sector, with footwear leading at 4.2% higher prices at Macy's, as reported in July 2025. Major brands have responded differently, with Nike implementing strategic price hikes of USD 5-10 on select footwear while maintaining prices on iconic styles. Consumer behavior is shifting in response, with March 2025 data showing 62% of shoppers expressing concern about rising costs, leading to the sharpest decline in consumer confidence since August 2021. The situation is particularly challenging for retailers as they balance inventory management with pricing strategies, evidenced by the elimination of the USD 800 de minimis rule in February 2025 affecting millions of daily shipments.

Higher clothing prices are officially here in the US