If you’ve been following our blog, you know we regularly break down the latest tariff twists and turns.

We've covered tariff updates previously, and now we're back with significant developments from August and September 2025, and there have been many important changes.

The global trade landscape shifted significantly this summer, especially for fashion, textile, and apparel supply chains. Brands, designers, and suppliers are grappling with higher import costs, whiplash policy changes, and new compliance challenges.

In this post, we’ll walk through the key tariff updates by region or theme, and then discuss what these changes mean for fashion industry professionals.

Tariff Rates Roundup by Region (July 30 to August 18)

Vietnam, Philippines & Indonesia

Vietnam has significantly reduced tariffs on U.S. imports to nearly zero, according to President Trump. In response, the United States has agreed to lower its substantial 46% levy to 20% on Vietnamese goods.

This development comes with important context for apparel brands:

• Transshipment challenges: Vietnam had implemented a "transhipped" tariff policy targeting Chinese companies routing products through Vietnam to evade U.S. tariffs. Despite intentions to reduce Vietnamese-Chinese trade dependencies, this measure proved largely ineffective as China remains a crucial manufacturing partner and one of Vietnam's largest trading partners.

• Regional alignment: Following Vietnam's lead, Indonesia and the Philippines have secured similar deals with the U.S., resulting in a 19% tariff rate on their exports.

For fashion and apparel companies sourcing from Southeast Asia, these adjustments represent a significant shift in the sourcing landscape, potentially affecting cost structures and supplier relationships across the region.

India's Double Tariff Blow

India faces one of the harshest tariff regimes.

As of August 7, 2025, the U.S. has implemented a 25% reciprocal tariff rate on Indian imports. An additional 25% penalty on transactions with Russia have been imposed due to India's continued imports of Russian oil, bringing the effective rate to 50%.

• Textile & Apparel Sector Impact: Approximately 70% of India's exports to the U.S. are exposed to these reciprocal tariffs. The sector now faces a tariff disadvantage of over 30 percentage points compared to competitors in Bangladesh, Vietnam, and Pakistan.

• Small Business Impact: Small Indian apparel exporters are bearing the brunt of these new tariffs. The 25% tariff particularly affects the carpet and jewelry industries, which are dominated by small and medium enterprises.

• Political Context: The U.S. administration's primary concern relates to trade deficits, with demands that India purchase more U.S. defense materials and other goods to balance trade.

• Geopolitical Shifts: As a result of increasing U.S. tariffs, India has drawn closer to China, with both nations demilitarizing their shared border and stabilizing their relationship – a development that could potentially destabilize U.S. influence in the region.

Market share is expected to erode significantly unless the Indian government provides subsidies or incentives for the sector, which has historically not been favored with such support.

The U.S. has indicated that secondary tariffs could be implemented if India continues purchasing Russian oil.

Europe & Other Regions – 15% Framework for EU:

The U.S. and European Union reached a framework deal (announced August 21) to cap most tariffs at 15% on trans-Atlantic trade.

Practically, this means EU-origin fashion goods that normally carry low MFN duty rates will now face a flat 15% U.S. tariff (if their normal rate was below 15%).

Major U.S. allies like Japan and South Korea also negotiated down to about 15% reciprocal tariffs.

For fashion and luxury brands, the EU deal at 15% helps moderate the cost of European apparel, footwear, and accessories compared to higher tariffs elsewhere.

China: Temporary Tariff Reprieve

Early August, the U.S. and China agreed to extend their tariff truce by 90 days, forestalling a dramatic escalation in duties.

After, President Trump’s executive order on August 11 suspended the impending tariff hikes on China until November 10, 2025, giving negotiators more time. Here’s what this reprieve means:

• Tariffs Frozen at Current Levels: During the extension, U.S. import tariffs on Chinese goods stay at the current 10% baseline rate (plus an existing 20% penalty on many products tied to earlier sanctions). In other words, most Chinese-made apparel and fabrics still incur roughly a 30% total tariff, but they won’t increase further for now. This is a relief given that, absent a deal, those rates could have surged well above 100%, effectively pricing Chinese products out of the marketreuters.com.

• Chinese Tariffs on U.S. Goods Hold at 10%: Beijing likewise agreed to maintain its retaliatory tariffs at 10% on U.S. exports during the truce period. China also postponed planned bans and restrictions on certain U.S. firms. The mutual pause eases tension as both sides signal willingness to negotiate a more lasting arrangement.

• Holiday Supply Chain Relief: The timing of this truce (Aug–Nov) is critical for fashion retailers. It covers the peak import season for holiday inventories, allowing brands to bring in Chinese-made merchandise for Q4 without sudden extra duties. Categories like electronics, apparel, and toys – all important for year-end sales – get a breather.

• Uncertain After November: The extension buys time, but it’s not a permanent fix. If U.S.-China talks falter by November, tariffs could jump dramatically. Fashion brands are hedging their bets – some front-loaded orders to arrive before the deadline, while others are exploring alternate sourcing in case the truce collapses. All eyes are on the negotiations: a deal could stabilize tariffs, but a breakdown would reignite the trade war at full force.

Transshipment Risks: The 40% Penalty

One of the most pressing issues flagged by trade trackers is transshipment – when Chinese goods are routed through a third country to disguise their origin.

• The U.S. has imposed a 40% tariff penalty on any product found to be transshipped from China, regardless of whether it passes through Vietnam, Indonesia, India, or elsewhere.

• This creates a serious compliance challenge for fashion brands: how do you verify that every zipper, button, or fabric roll labeled “Made in Vietnam” is truly produced there and not sourced from China?

For fashion importers, the takeaway is clear: documentation alone may not be enough. Brands need deeper visibility into their supply chains, robust certificates of origin, and closer collaboration with suppliers to avoid being hit with this costly tariff.

End of the De Minimis Exemption (No More Duty-Free Small Imports)

Until recently, brands and e-commerce retailers could ship small orders to U.S. customers duty-free as long as the package was under $800.

This was called the de minimis exemption. It made direct-to-consumer cross-border shopping much cheaper and faster.

But recently, this scenario changed.

• What changed: As of May 2, 2025, the U.S. removed this exemption for goods coming from China (so even a $20 T-shirt from Shein started getting taxed). Then on August 29, 2025, the U.S. scrapped the exemption for all other countries too.

• What it means now: Any international package worth more than $800 that’s shipped to a U.S. customer must pay import tariffs and go through full customs. No exceptions.

U.S. officials justified the move on multiple grounds. They argued the de minimis rule had become a “catastrophic loophole” exploited to evade tariffs.

Why this matters for fashion:

• Higher costs for consumers: Online shoppers in the U.S. will now see duties added at checkout or higher prices overall, particularly for apparel and footwear.

• More red tape for brands: Every order above the $800 threshold now requires paperwork, duty payments, and longer processing times. This means that brands are now facing additional millions in tariff fees. What was once a smooth direct-to-consumer channel is suddenly more expensive and complex.

• E-tailer fallout: The Canadian luxury platform Ssense has already cited the end of de minimis, alongside new tariffs, as a factor in its bankruptcy protection filing. Their U.S. shipments became dramatically costlier almost overnight, putting huge pressure on margins.

• Postal delays: 88 global postal operators have suspended operations to the U.S until solutions are put in place to address packages that were halted due to unpaid customs charges.

The takeaway is clear: the era of duty-free small packages is over. For fashion brands, designers, and suppliers, this means factoring in tariffs on virtually every cross-border shipment to U.S. customers and reassessing logistics strategies to protect profitability.

Consequences for Fashion Brands and Professionals

The latest wave of tariffs and trade measures is hitting every part of the fashion supply chain. From sourcing costs to logistics, brands, suppliers, and retailers are being forced to adapt quickly.

Soaring Import Costs

Nearly 98% of clothing sold in the U.S. is imported, so any tariff increase hits the fashion sector broadly and deeply.

With many apparel tariffs now in the 15–30% (or higher) range, brands are facing drastically higher costs to bring in products.

We’re already seeing companies pass on these costs to consumers: for example, luxury houses like Hermès and Burberry raised U.S. retail prices earlier this year to offset the new 10%+ tariffs, and sportswear giant Adidas took a “double-digit million-euro” hit due to U.S. duties.

Margins are getting squeezed, and price tags are rising – at the risk of alienating cost-sensitive shoppers.

Pricing Strategies and Profit Pressure

High-end brands have some cushion to adjust prices, but mid-tier and independent labels operate on thinner margins.

Many small designers and custom fashion businesses simply cannot absorb a 20-30% import duty increase without an equivalent price increase, which is a tough sell to clients.

They’re now faced with explaining surcharges or surging prices to customers. Nonetheless, consumer demand may soften if apparel prices keep climbing, especially in discretionary categories like luxury and bespoke fashion.

Sourcing Shifts Stalled

Many fashion companies spent the past few years diversifying away from China (moving production to Vietnam, India, Bangladesh, Mexico, and other countries) hoping to escape the trade war tariffs. Those efforts have now hit a wall.

The new U.S. tariff schedule eliminated previous advantages by imposing similar duties across most major sourcing countries.

A brand that relocated its manufacturing now discovers virtually no tariff benefit. This undermines years of supply-chain strategy.

Companies are now reluctantly considering reshoring or sourcing from nearby countries with trade deals, but those options (like Central America under CAFTA-DR) are limited in capacity and were even hit with the baseline tariffs too.

In short, there’s no obvious low-tariff haven for apparel sourcing at the moment, forcing brands to rethink their mix of suppliers and possibly favor those with other advantages (speed, quality) since the cost playing field has evened out (everyone’s paying tariffs).

Compliance and Paperwork

The regulatory burden on fashion importers has multiplied. With the de minimis loophole closed, every import requires full customs compliance.

This means more paperwork, more brokerage fees, and potentially slower deliveries, which is especially painful for small businesses that prototype frequently or rely on just-in-time materials.

Moreover, rules-of-origin compliance is now heavily scrutinized due to the transshipment crackdowns.

Brands must exercise strict oversight of their supply chains to ensure, for instance, that a “Made in Vietnam” shipment isn’t inadvertently containing Chinese zippers or cloth that could subject it to a 40% tariff penalty.

Many companies are investing in better traceability as strategy, tracking components and raw materials, and working closely with suppliers to get accurate certificates of origin.

Bottom Line of The New Tariff Landscape

The tariff upheavals of August–September 2025 have forced the fashion industry into a period of rapid adjustment.

Higher costs are a new reality, and staying compliant (and competitive) is more complicated than ever. Brands and retailers that survive and thrive will be those that adapt proactively, whether by renegotiating with suppliers, reengineering products to lower costs, adjusting pricing strategies, or clearly communicating with customers about why prices are up.

As we’ve seen, trade policy can change overnight. Fashion professionals must now keep one eye on updates while juggling design, marketing, and sales. It’s a challenging balancing act, but it’s the new norm in an industry caught in the crossfire of global tariffs.

Keep following our content blog as we bring more current roundups on tariffs and policy changes, and also on sustainability regulations which is also an important matter for brands today.