A small fashion brand owner, Andrew Chen, shared his insights on how the Trump tariffs will affect his company. Let's delve into the three significant ways these tariffs will impact his business.
Cost Increase
One of the most noticeable effects of the tariffs for Andrew Chen's brand, 3sixteen, is the increase in costs. The brand imports materials from Japan, India, and the European Union, particularly Portugal. With Japan being a significant source for denim, the recent 24% tariff imposed by Trump has a direct impact on the brand's expenses. Chen mentioned that a $10 rise in raw material costs could potentially lead to a $50 increase in the final product cost. This increase in costs may need to be absorbed by the brand, passed on to customers, or a combination of both.
Uncertainty in Business Operations
Trump's tariffs introduce a level of uncertainty for Andrew Chen and his business. The fluctuating nature of tariffs, such as the initial announcement of 25% tariffs on goods from Canada and Mexico followed by a rollback for certain goods, adds complexity to business planning. For 3sixteen, using Jersey fabric knit and fleece from Canada, the uncertainty surrounding potential tariff changes can impact decision-making and financial forecasting.
Impact on Overseas Market
Another significant concern for Andrew Chen is the potential deterioration of 3sixteen's overseas market due to Trump's tariffs. Retailers outside the US may reconsider stocking American goods, impacting the brand's international presence. Chen highlighted past trade tensions between the US and the EU during Trump's first term, which led to challenges in maintaining overseas partnerships. The overall retail industry is preparing for price increases due to tariffs, with big retailers like Best Buy and Walmart acknowledging the inevitable changes in product pricing.
As the fashion industry navigates through the implications of Trump's tariffs, small businesses like 3sixteen are faced with strategic decisions to mitigate the impact on their operations and financial stability. The evolving landscape of international trade relations requires businesses to adapt swiftly to ensure long-term sustainability and growth.
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By: abharade@insider.com (Aditi Bharade)
Title: Impact of Trump Tariffs on a Small Fashion Brand Owner
Sourced From: www.businessinsider.com/fashion-brand-owner-3-big-ways-trump-tariffs-hit-company-2025-4
Published Date: Tue, 08 Apr 2025 05:25:13 +0000
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