Impact of New Tariffs on Retail: Textiles and Apparel Sectors Brace for Higher Costs
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In light of the rollout of tariffs against China, Canada and Mexico, research from The Kaplan Group looked at the sourcing exposure of various categories and found that retailers and manufacturers of textiles and apparel are facing the prospect of higher costs. “Recent tariff increases on consumer goods and textiles threaten to drive up prices for U.S. retailers and consumers, particularly for industries with heavy reliance on imports from China and Mexico,” the report’s authors said, adding that textiles, apparel and consumer goods sectors “are at risk of increased costs, loan defaults and potential closures due to the new tariffs on China.” Related Articles Business Features E-Commerce Study Reveals Critical Impact of Search Functions on Revenue Growth Retail Roberto Cavalli Returns to L.A. With Its First Boutique in 20 Years at Beverly Center Researchers found that textiles had the highest with 99 percent “exposure to key international markets, making it highly vulnerable to tariff changes.” The apparel sector faces 74 percent to China and 8 percent to Mexico, “suggesting potential disruptions in retail supply chains and rising costs for clothing imports.” You May Also Like The study also revealed that while 2.8 percent of total trade falls in these high-risk categories, “industries like consumer goods are disproportionately affected, meaning small changes in tariffs can create outsized market effects.” With apparel, the authors of the report said the high exposure “could lead to higher costs for consumer apparel, empty shelves due to supply chain issues, and even the closure of certain retail chains, with brands such as Nike and Adidas at risk.” The report stated that even small changes in tariffs have the potential to create “a snowball effect that could massively increase costs for key products Americans use every day, from clothing to consumer electronics.” Dean Kaplan, president of The Kaplan Group, said consumer goods brands and retailers “need to prepare for supply chain shifts and price increases due to new trade policies. Retailers that depend on overseas suppliers will need to adapt quickly — whether through supplier diversification, strategic pricing, or shifting production sources — to manage these new risks.”
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