.png)
The 2025 tariff escalations between the United States and China have sent shockwaves through the industry, with some categories now facing duties as high as 145%. The impact is clear: global brands must now decide whether to pivot, push on, or reinvent their models entirely.
What happens next could reshape the global fashion map for the next decade.
Fashion and footwear brands have long relied on China, Vietnam, and wider Asia as production powerhouses. However, the reintroduction of aggressive tariffs under the Trump administration has rendered old assumptions about cost, speed, and access obsolete.
Brands like Skechers , which once leaned heavily on Chinese production, have already begun relocating manufacturing hubs to countries like Indonesia and Mexico. CEO Robert Greenberg admitted that “uncertainty around trade is forcing us to rethink everything from sourcing to sales forecasts” (Reuters).
Nike, meanwhile, continues to diversify, now manufacturing over 45% of its footwear in Vietnam — a strategic decision that has proven prescient given today’s tariff turbulence.
The fashion sector now faces two broad paths:
Supply chain diversification is no longer optional. Brands are exploring alternatives not only in Southeast Asia, but increasingly in Latin America and Eastern Europe.
Others are exploring tariff engineering by legally altering product classifications to reduce duties. Packaging changes, material swaps, or country-of-origin adjustments are all tools being actively deployed.
For some luxury players, repositioning supply chains could risk diluting brand prestige or disrupting artisan partnerships. Brands like Hermès and CHANEL may choose to absorb tariff costs in the short term to maintain craftsmanship integrity.
In the mid-market, others are passing increases directly to consumers. According to McKinsey, the average retail price for imported leather goods into the US has risen by 8% year-on-year, a cost many brands see as unavoidable given current pressures.
New free trade agreements and shifting production hubs could usher in a renaissance for “Made in Mexico,” “Made in India,” and beyond.
Yet caution remains: simply moving production does not eliminate risk. Political stability, infrastructure reliability, and skilled labour availability are critical. Fast moves could backfire without thorough due diligence.
Brands serious about agility are investing in smart supply chain management systems, AI-driven demand forecasting, and dynamic sourcing models.
These tools allow faster reaction times to sudden tariff changes, commodity price spikes, or regional disruptions.
In 2025, resilience is becoming a competitive advantage.
Fashion has always been a global business. But rarely has the playing field shifted this dramatically, this quickly.
For CEOs, the challenge is clear:
The brands that answer these questions strategically, rather than reactively will not only weather the storm, but emerge stronger.
Tariffs are a disruption, yes. But they are also a catalyst.
In forcing a reset, they present fashion with an opportunity to future-proof operations, localise where it makes sense, and build supply chains that are not only cost-effective but conscious, agile, and resilient.
Sometimes, the hardest changes lead to the most meaningful evolutions.
How is your brand planning to adapt?
Looking to future-proof your team or hiring strategy?
At Virtua, we help both scaling brands and global businesses build the right leadership and talent infrastructure for sustainable growth. Let’s explore how we can support your next phase.
Get in touch with us
.png){kind=small}