US Trade Policies Disrupt Supply Chains: Tariff Hikes Pose Major Challenges to Global Trade and Domestic Inflation

The unilateral and sweeping tariff increases by the US government represent a significant challenge to the existing global trade system, with profound implications for the textile and apparel industry. In particular, the drastic tariff hikes are set to disrupt US textile imports, especially in the clothing sector, where approximately 95% of garments sold in the US are imported.

Severe Disruptions to Supply Chains

The abrupt tariff increases have left US clothing importers in a precarious position. With most apparel products sourced from overseas, finding immediate alternatives for such a vast array of goods is nearly impossible. Key suppliers in China, Southeast Asia, and South Asia—who dominate the global textile supply chain—face sudden cost surcharges, forcing importers to either absorb the higher tariffs or pass them on to consumers. For instance, a major US retailer sourcing cotton shirts from China now faces a 25% tariff increase, raising the landed cost per unit by 18-22%. With limited time to restructure supply chains, many companies are scrambling to secure existing contracts, fearing further disruptions.

Insurmountable Barriers to Onshoring

While some policymakers advocate for shifting clothing manufacturing to the US, this proposal ignores fundamental economic realities. The US textile and apparel industry has long relied on global supply chains due to stark labor cost differences. Rebuilding domestic production would require:

1. Massive Labor Cost Increases: US apparel workers earn an average of $18-25 per hour, compared to $2-5 per hour in key manufacturing hubs like Bangladesh and Vietnam. A typical cotton T-shirt produced in Southeast Asia for $2.50 would cost $12-15 to make in the US, a price gap that would eliminate competitiveness.

2. Skilled Labor Shortages: The US has lost over 85% of its apparel manufacturing workforce since 2000. Training new workers in specialized skills like pattern-making, embroidery, and quality control would take years, delaying production and exacerbating costs.

Inevitable Inflationary Pressures

The combination of tariff-driven import cost increases and limited domestic production capacity will directly translate to higher clothing prices for US consumers. Industry analysts project that apparel prices could rise by 15-20% in 2024, contributing to already elevated inflation levels. For low- and middle-income households, which spend a higher proportion of their income on clothing, this would further strain budgets. Moreover, the ripple effect extends beyond apparel. Textile suppliers, logistics firms, and retail sectors will face cascading cost pressures, threatening broader economic stability.

Global Trade System at Risk

The US tariff measures not only harm its own economy but also undermine the rules-based global trade order. Retaliatory measures from trading partners could trigger a full-blown trade war, disrupting supply chains for electronics, machinery, and agricultural products worldwide. As the world’s largest apparel importer, the US holds significant leverage, but its current approach risks long-term damage to trade relationships and global economic growth.

Conclusion

The US government’s tariff policies are a double-edged sword: while intended to protect domestic industries, they ultimately expose vulnerabilities in the US supply chain, threaten consumer affordability, and destabilize the global trade system. As the industry braces for impact, stakeholders urge policymakers to prioritize dialogue and pragmatic solutions over unilateral measures, ensuring the resilience of both domestic markets and international trade networks. For apparel businesses, adapting to these changes will require diversifying sourcing to tariff-advantaged regions, investing in supply chain resilience, and advocating for policy clarity to mitigate long-term risks.

In response to US tariff upheaval, TailorMax has strategically shifted to emerging markets like ASEAN, Africa, and the Middle East, leveraging local partnerships, regional trade agreements, and e-commerce to tap into growing demand—such as adapting to ASEAN’s preference for breathable fabrics and targeting Africa’s digital economy. The company has also diversified its sourcing network to tariff-advantaged regions like Bangladesh and Vietnam, reducing market reliance and enhancing cost competitiveness. Through these agile moves, TailorMax demonstrates how apparel businesses can mitigate trade risks by embracing multi-market strategies, fostering regional collaborations, and building flexible supply chains to sustain growth amid global uncertainties.