American companies rely on China for some portion of their manufacturing. The new tariffs could force them to change where and how they make their products. It means costs could jump, and those higher costs could get passed on to consumers. But increasing prices would lead to a drop in sales, so they are focused on preserving margins. There have been a number of duty adjustments but this is the first time it’s affecting apparel in a major way. In the past, it was focused on other products and materials. Brands that are built on the idea of selling luxury apparel at low and transparent markup prices are bracing for tariffs on the garments they make in China.

Clothing companies already face varying customs duties, based on fabrics and garment type, when they bring goods into the United States. The impact of the tariffs on retailers will depend a lot on how reliant they are on Chinese manufacturers. It may end up benefiting extra low-priced retailers, which have already moved away from the country to cheaper nations in recent years. The US has threatened to impose new tariffs on nearly everything that comes to the United States from China.