Apparel Import Bookings Down Due to Reciprocal Tariffs
Context & Key Developments
• Pre-Tariff Reaction: Ahead of U.S. tariff escalation under President Trump, apparel importers sharply curtailed shipments.
• Data Insight:
• Apparel import bookings (HS Code 62) dropped 59.1% in the week of March 31 — the steepest decline across all product types.
• Other impacted categories include:
• Wool and fabric (HS 51): -57.1%
• Feathers and down (HS 66): -54%
• Textile fabrics (HS 59): -48.9%
• Special wovens/trimmings/laces (HS 58): -40.5%
Key Drivers of Import Retraction
• Tariff Volatility:
• Margins in apparel (low-margin, high-volume) make the industry highly sensitive to cost shocks.
• Risk of financial exposure due to sudden tariff activation.
• Retailer Response:
• Amazon and Five Below have paused or canceled China-origin orders.
• Maersk issued instructions halting container deliveries and requiring unpacking of loaded units.
Tariff Landscape (as of post-announcement)
• Tariff Adjustments:
• 90-day reprieve granted; most countries scaled to a 10% baseline.
• China faced a tariff escalation to 125%, plus 20% fentanyl-related duties.
• Supply Chain Implications:
• Retailers are unsure if the reprieve will hold; many have opted for a “wait-and-see” strategy.
• Brands willing to absorb risk have selectively resumed shipments within the transit window.
Strategic Implications for Retailers
• Cost Sensitivity:
• Doubling of sourcing costs could severely impact pricing models (e.g., H&M’s low-price strategy).
• Inventory Management:
• Pre-tariff front-loading may lead to overstock in Q2–Q3 2025.
• Forecasted 20%+ import decline in H2 2025, increasing risk of product shortages.
• Consumer Impact:
• Expect reduced assortment and SKU diversity in stores by summer 2025.
• Not a full depletion of shelves, but noticeable narrowing of options.
Recommendations for Apparel Brands & Retailers
1. Scenario Planning & Risk Modeling:
• Conduct financial stress tests on tariff impact (e.g., 125% China duties).
• Model best/worst-case scenarios for 90-day reprieve expiration.
2. Diversify Sourcing Strategy:
• Accelerate shift to Vietnam, Pakistan, Cambodia, Bangladesh and other lower-risk geographies.
• Build redundancy into supply networks to mitigate country-specific tariff exposure.
3. Inventory Optimization:
• Reassess stock levels to balance risk of overstocking vs. summer shortage.
• Focus on core SKUs and reduce breadth where possible to preserve margins.
4. Supplier Collaboration:
• Engage in active dialogues with logistics partners and vendors to anticipate disruptions.
• Establish flexible order terms to adjust quickly to tariff developments.
5. Customer Communication:
• Prepare messaging for potential product shortages or assortment changes.
• Reinforce value proposition through pricing transparency and assortment curation.
Useful Links for Further Reading
• https://www.nytimes.com/2025/04/06/world/europe/trade-trump-tariffs-brexit.html
• https://www.dw.com/en/trump-tariffs-50-nations-seek-new-us-trade-talks/live-72156081
• https://www.nbcnews.com/business/business-news/us-stock-futures-plunge-ahead-monday-open-trump-tariffs-shock-continue-rcna199924
• https://www.bbc.com/news/articles/c2093qgx14po
• https://www.usatoday.com/story/money/2025/04/06/trump-tarriff-impact/82964313007/
• https://www.cnn.com/politics/live-news/trump-tariffs-news-04-06-25/index.html
• https://apnews.com/article/trump-tariffs-recession-financial-markets-negotiations-retaliation-860760cdc1aa2cc58853c9aab987e36d
• https://www.whitehouse.gov/presidential-actions/2025/04/regulating-imports-with-a-reciprocal-tariff-to-rectify-trade-practices-that-contribute-to-large-and-persistent-annual-united-states-goods-trade-deficits/
• https://www.theguardian.com/us-news/2025/apr/06/trump-tariffs-administration-reacts