The Current Administration and the Implications for the Fashion Industry

---

The return of President Donald Trump to the White House in January 2025 has sent shockwaves through the global fashion industry. With sweeping tariffs, withdrawal from international climate agreements, and a fundamental shift in U.S. environmental policy, the implications for fast fashion and sustainability are profound and multifaceted. For organizations committed to ethical and sustainable practices like Avartana, understanding these changes is crucial for navigating the evolving landscape.

The Tariff Revolution: Reshaping Global Fashion Economics

Record-Breaking Duties Transform Supply Chains

The most immediate and dramatic impact of the Trump administration has come through unprecedented tariff increases. By October 2025, U.S. apparel import tariff rates surged to 26.4%, nearly doubling from the 14.7% recorded in January. During the peak implementation period in spring 2025, tariffs spiked from 13 to 54 percent on apparel and footwear, creating chaos across the industry.

Major fashion companies are reporting staggering financial impacts: G-III Apparel expects $155 million in additional tariff expenses, Victoria's Secret projects $100 million in 2025 costs, and Tapestry faces $160 million in additional costs. The consumer impact is equally severe, with Yale's Budget Lab projecting that clothing prices will rise 28% in the short run and remain 10% higher in the long run.

The De Minimis Loophole Closes

Perhaps even more significant for ultra-fast fashion players like Shein and Temu has been the closure of the de minimis exemption. This previously allowed shipments worth $800 or less to glide duty-free into the country, enabling these platforms to offer rock-bottom prices through direct-to-consumer shipping. The elimination of this loophole fundamentally disrupts their business model, forcing them to absorb costs or pass them to consumers who have grown accustomed to nearly free clothing.

The Sustainability Paradox: A Crisis and an Opportunity

Sustainable Brands Bear the Brunt

While tariffs might seem like they would hurt fast fashion most, the reality is more nuanced and troubling for sustainability advocates. Sustainable labels operate within fragile margins, already paying more for fair wages, organic or low-impact fibers, traceable supply chains, and small-batch production. Sudden tariff increases leave these ethical brands with little room to adapt.

Fast fashion giants, by contrast, possess massive economies of scale and can absorb shocks by cutting corners elsewhere, shifting production quickly, or raising prices minimally. Fast-fashion brands are easily able to absorb these costs, while smaller brands will be hit harder. This creates a perverse outcome where the very brands trying to do the right thing face greater competitive disadvantages.

Environmental Momentum Stalls

The fashion industry accounts for approximately 10% of global carbon emissions, releases 500,000 tons of microfibers into oceans annually, and uses 60% plastic-based materials with less than 1% of textiles recycled into new clothing. Progress on these environmental challenges requires sustained policy support and investment in innovation.

However, the Trump administration has systematically dismantled environmental frameworks. On his first day in office, President Trump signed Executive Order 14162, withdrawing the United States from the Paris Climate Agreement. This withdrawal, which becomes effective in January 2026, removes U.S. financial commitments to climate action and signals a fundamental deprioritization of environmental concerns.

The administration has also proposed loosening emissions regulations and declared a national energy emergency, favoring fossil fuels. For the fashion industry, this means reduced incentive to invest in sustainable innovations like low-impact materials, organic cotton, and recycled polyester.

The Fast Fashion Resilience: An Unintended Consequence

Supply Chain Agility Defeats Protectionism

One of the most surprising outcomes of Trump's tariffs has been the resilience of ultra-fast fashion. While the de minimis closure was expected to devastate these business models, these giants are finding workarounds by diversifying production to leverage established infrastructure in countries like Vietnam, Cambodia, and the Philippines.

Between 2019 and 2024, U.S. apparel imports from Cambodia increased 42 percent while imports from China declined by 30 percent. This doesn't represent a fundamental shift away from mass production, but rather it's simply geographical arbitrage. The environmental damage continues unabated, just relocated.

Global Expansion Accelerates

Even more concerning for sustainability advocates, tariff pressures have actually fueled fast fashion's global expansion, sustaining high-volume output despite U.S. challenges. When U.S. markets become more expensive, these companies simply redirect excess production to markets like Australia where favorable trade rules persist. The result is that overconsumption and waste continue worldwide, regardless of U.S. policy changes.

Environmental Policy Rollbacks: The Bigger Picture

Paris Agreement Withdrawal Redux

The U.S. withdrawal from the Paris Agreement has consequences extending far beyond fashion. One study found that U.S. non-participation in the Paris Agreement lowers achieved global emission reduction by more than a third (38.2%), reflecting America's role as both a lead emitter and holder of ambitious reduction targets.

For the fashion industry specifically, this withdrawal removes pressure and support for decarbonization efforts. The U.S. withdrawal from several Just Energy Transition Partnership agreements with South Africa, Indonesia, and Vietnam cancels over $1 billion in commitments to South Africa and over $3 billion to Indonesia and Vietnam, funding that could have supported cleaner manufacturing in key garment-producing nations.

EPA Actions and Regulatory Retreat

Beyond international agreements, domestic environmental protections are also under assault. The EPA dropped a proposal that would essentially erase the landmark Endangerment Finding—the legal backbone for regulating greenhouse gas emissions. If implemented, this could handicap future administrations' ability to regulate emissions from major polluters.

Industry Response: Adaptation and Resistance

The Corporate Dilemma

Despite federal policy reversals, many fashion companies continue pursuing sustainability initiatives, driven by consumer demand, international regulations (particularly from the EU), and long-term risk management. It is an irreversible trend for fashion companies to allocate more resources to comply with upcoming or newly implemented sustainability and environmental-related legislation, whether from the EU or the U.S. state level.

Interestingly, vague terms like "sustainable" and "eco-friendly" are gradually being replaced by more neutral, fact-based keywords such as "regenerative," "textile waste," and "low impact", suggesting companies are moving toward more substantive, measurable commitments rather than greenwashing.

State and Local Leadership

Just as during Trump's first term, state and local governments are stepping up where federal leadership retreats. California and other states continue implementing robust climate policies and sustainable fashion initiatives regardless of federal direction. This creates a patchwork regulatory environment that companies must navigate, but it also provides continued momentum for sustainability efforts.

Suppliers Lead the Way

Surprisingly, garment manufacturers in the global south (India, Vietnam, etc.) are investing in clean energy and efficiency, betting that when governments return to climate commitments, they'll be ready to meet net-zero goals. This supplier-driven sustainability push may prove more durable than policy-driven initiatives.

The Consumer Impact: Prices, Choices, and Behavior

The Affordability Crisis

With 92 percent of consumers expressing concern about their household finances and over 80 percent saying good value for money is a top buying factor, the timing of price increases couldn't be worse. As major brands like Nike, Hermès, and Ralph Lauren raise prices to offset tariff costs, consumers face difficult choices.

This affordability crisis could push shoppers in two directions: toward cheaper fast fashion alternatives (perpetuating the sustainability problem) or toward secondhand and circular fashion models. Early indicators suggest thrifting proponents hope more shoppers will turn to sustainable clothing as prices rise, with resale platforms potentially benefiting from the tariff environment.

Overconsumption vs. Conscious Consumption

Some sustainability advocates see a silver lining in higher prices potentially curbing overconsumption. However, they caution against framing the Trump administration as having sustainability in mind, noting that none of the tariffs were designed with environmental or labor considerations.

The reality is that for sustainability to advance, it needs intentional policy support, not accidental price increases that might equally drive consumers toward cheaper, less sustainable options.

Regional Variations: How Different Markets Adapt

The China Question

China remains central to fashion manufacturing despite tariff pressures. Notably, less than half of China's clothing production is exported, indicating significant untapped export capacity, and the unit price of U.S. apparel imports from China dropped by more than 21% between 2018 and 2024. This price competitiveness, combined with established infrastructure and expertise, means China will remain a major player regardless of tariff levels.

Vietnam and Cambodia's Rise

These Southeast Asian nations have become primary beneficiaries of supply chain diversification. U.S. imports from Vietnam rose 12.5% in July 2025 as brands seek alternatives to Chinese manufacturing. However, these countries also face their own tariff challenges, with Vietnam and Cambodia facing comparable high rates (46-49%) to China's stacked duties (up to 54%).

India's Steep Challenge

India faces particularly harsh treatment, with a 25% reciprocal tariff rate plus an additional 25% penalty due to Russia oil imports, bringing the effective rate to 50%. This creates a tariff disadvantage of over 30 percentage points compared to competitors in Bangladesh, Vietnam, and Pakistan, threatening India's position as an apparel manufacturing hub.

The Path Forward: Strategies for Sustainable Fashion

Embrace Circular Business Models

The tariff environment creates new opportunities for circular fashion. Resale, rental, repair, and recycling models become more competitive as new clothing prices rise. "Reuse, repair, recycling, and less virgin fiber use means less energy and water wasted," which aligns with energy resilience and independence goals.

For brands like Avartana, investing in take-back programs, resale platforms, and durable design that encourages longevity could provide competitive advantages while advancing sustainability goals.

Regional Production and Nearshoring

The Americas Act, a bipartisan initiative, includes $14 billion in incentives to accelerate domestic innovation in textile production. While "Made in USA" faces significant challenges including high labor costs and limited infrastructure, nearshoring to Mexico and Central America offers a middle path that reduces shipping emissions and tariff exposure.

Transparency and Traceability

As regulations tighten (particularly in the EU with measures like Extended Producer Responsibility), brands that have already invested in supply chain transparency and traceability will be better positioned. This means mapping supplier relationships, understanding material origins, and being able to demonstrate compliance with emerging standards.

Consumer Education and Engagement

In an environment where prices are rising across the board, brands must clearly communicate their value proposition. Why does sustainable fashion cost more? What are consumers getting for that premium? Building deeper connections with conscious consumers through storytelling, transparency, and education can create loyalty that transcends price competition.

Looking Ahead: Uncertainty and Opportunity

Legal Challenges Ahead

There's significant uncertainty around the tariff regime itself. The Supreme Court recently heard arguments in cases that could overturn a wide array of the president's tariffs, with businesses potentially able to recover additional costs imposed by them. The central legal question is whether the administration exceeded its authority under the International Emergency Economic Powers Act.

If the courts strike down major portions of the tariff program, the industry could see rapid reversals. However, 76 percent of fashion executives say trade disruptions and rising duties will shape the industry in 2026, suggesting most are planning for tariffs to remain a significant factor.

The 2026 Midterms and Beyond

Political winds shift, and with them, policy priorities. State-level action on climate and sustainability continues regardless of federal direction. The EU's aggressive sustainability mandates affect any brand selling in European markets. And younger consumers increasingly prioritize environmental and social responsibility in their purchasing decisions.

Technology and Innovation

Despite policy headwinds, technological innovation in sustainable materials, manufacturing processes, and circular business models continues. Brands investing in these areas position themselves for long-term success as environmental regulations inevitably tighten globally, even if U.S. federal policy lags.

Conclusion: Navigating the Storm

The Trump administration's policies represent significant headwinds for sustainable fashion. Tariffs disproportionately burden small ethical brands while fast fashion giants adapt and continue their environmentally damaging practices. The withdrawal from the Paris Agreement and rollback of environmental regulations remove crucial policy support for decarbonization.

Yet sustainability in fashion isn't dead, it's evolving. Consumer demand persists, particularly among younger demographics. International regulations continue advancing. Suppliers in manufacturing hubs invest in cleaner production. Innovative brands find ways to deliver sustainable products despite challenging economics.

The path forward requires:

• Resilience: Building business models that can weather policy uncertainty and economic volatility

• Innovation: Investing in circular models, transparent supply chains, and sustainable materials

• Education: Helping consumers understand the true cost of fashion and the value of sustainable alternatives

• Advocacy: Supporting policies that level the playing field for ethical brands

• Collaboration: Working with suppliers, peers, and stakeholders to advance industry-wide sustainability

  
  

The Trump era may slow progress on fashion sustainability, but it cannot stop brands and consumers committed to changing how we make and consume clothing. The climate crisis, waste mountains, and labor exploitation that plague the industry existed before these policies and will outlast them. The question isn't whether fashion must become sustainable. Will sustainability move fast enough to matter?

In that context, the current challenges become not just obstacles to overcome, but opportunities to demonstrate that sustainable fashion is a resilient, necessary evolution of how we clothe ourselves and care for our planet.

This analysis is based on research current as of January 2026. Fashion industry conditions and policies continue to evolve rapidly. Brands should consult with trade, legal, and sustainability experts for guidance specific to their operations.