Tariffs and the Fashion Industry: Key Takeaways from the CFDA’s Discussion

Executive Summary

On Wednesday, July 25, the Coresight Research team attended a discussion hosted by the Council of Fashion Designers of America (CFDA) on the impact of new US tariffs on Chinese-produced goods. Lisa Metcalfe, COO of Pam and Gela, and her husband, James Metcalfe, Senior Vice President of Production and Product Development at Alice and Olivia, walked the audience through how new tariffs could affect the fashion industry. Here, we share our key takeaways from the discussion.

• The new tariffs, announced earlier this July and expected to take effect later this year, are of particular interest to the fashion community: although fashion goods compose only 6% of incoming products to the US, they account for 51% of US incoming tax revenues.
• Options that may seem like quick fixes usually are not as straightforward as they seem. Changing production sites or looking into duty-savings initiatives and free trade zones are often more trouble than they are worth.
• The fashion industry should not be overly concerned about the new tariffs and enforcement strategy: they are more of an inconvenience than a disaster. It is simply important for companies and brands to keep themselves informed and not cut any corners.