On Saturday, the Trump administration implemented 25 percent tariffs on all imports from Canada and Mexico, as well as a 10 percent levy on goods from China. Like TikTok influencers in denial about the ban a couple weeks ago, many in the fashion industry were hoping until the last minute that the tariff threat was just bluster. Unlike the TikTok ban, which President Donald Trump temporarily waved away with an executive order, the tariffs appear here to stay. Trump said on Friday that there were no immediate concessions Canada, Mexico or China could make to reverse his trade policy.
What will this mean for fashion? China remains America’s biggest source of apparel, but its share has fallen steadily over the last decade, making up 21 percent of imports by value in 2023, according to the US International Trade Commission. Analysts estimate a 10 percent tariff, while unwelcome, won’t upend most companies’ finances, but will add momentum to the long-term move out of China.
About 15 percent of apparel imports by value come from the Americas, and Mexico has seen some garment manufacturing relocate from China since the pandemic. But a 25 percent tariff would probably quash the nearshoring trend. Trump’s brief threat to slap tariffs on Colombia last month will have a similar dampening effect; companies will be wary of moving factories closer to the US if there’s a chance the economics of that decision could be upended literally overnight.
This week, we’ll see how fashion retailers react to the tariffs (several major brands will have an opportunity to talk about the impact when they report earnings; more on that below). This is also just the beginning; Canada, Mexico and China are expected to retaliate, and Trump is already talking about more tariffs on other trade partners.
New York Fashion Week
New York Fashion Week kicks off on Thursday, and pre-season chatter has centred on who’s missing from the schedule: the list includes Proenza Schouler, whose founders recently stepped down, and Willy Chavarria, who showed in Paris. The latter’s defection – which the designer told Vogue is a “long-term” move — is a particular blow to New York, where Chavarria had in recent seasons established himself at the front of a wave of homegrown talents who could plausibly anchor the week.
Christopher John Rogers, another much-lauded New York designer, returns to the schedule after five years, and will take the high-profile end-of-first-day slot Chavarria occupied in September. Thom Browne is also back, as is Todd Snyder, Joseph Altuzarra and Norma Kamali.
But the most closely watched returnee is Calvin Klein, which will show the first collection from Veronica Leoni on Feb. 7. This is a high stakes debut, as parent company PVH has been working for years to rekindle consumer interest in the brand. The Jeremy Allen White underwear ad was a year ago, and while sales are falling at a slower pace, analysts and investors are expecting a return to growth in 2025. On Friday, Calvin Klein intends to show it can sell more than underwear, clawing back ground it ceded seven years ago when it shut down Raf Simons’ 205W39NYC line.
Leoni certainly has the right experience, with stints at Jil Sander, Celine, Moncler and The Row, and she was an LVMH Prize finalist with her own brand, Quira, in 2023. Then again, Simons had an even more impressive resume, but the brand couldn’t connect what he sent down the New York runway with Calvin Klein’s mainstream audience.
Retail Earnings
Meanwhile on Wall Street, retail earnings season is kicking into high gear, with Tapestry, Capri, e.l.f., Ralph Lauren, Under Armour and Skechers all reporting holiday quarter results. Expect plenty of talk about the tariff threat, China’s sluggish economy and the resilient US consumer. E.l.f.’s CEO has been one of the few to publicly push back against President Donald Trump’s anti-DEI efforts, which may come up on the company’s earnings call on Thursday. Dealmaking will be on analysts’ minds as well after a busy start to the year. Will Tapestry confirm it’s on the hunt for new brands to pair with Coach and Kate Spade, after the collapse of its bid for Capri? And will Capri confirm those Versace rumours? We’ll get a better sense this week.
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