US fashion brands face an ‘existential threat’ as tariff reality sets in

Executives expected Trump’s latest round of tariffs, announced on 2 April, to be bad. They were far, far worse than imagined.

The “Liberation Day” tariffs on $2.5 trillion worth of imports moved executives from companies based in the US with overseas production to mobilise, calling board meetings and spending time on the phone with suppliers in countries like Vietnam, Cambodia and Bangladesh, which were slapped with 46 per cent, 49 per cent and 37 per cent tariffs, respectively. One US brand created a “tariff task force” on Thursday, assembled with team members across sourcing, production, product development, merchandising, IT and more. Stock prices tumbled, with the S&P 500 losing $2.4 trillion in one day. Companies like Nike, American Eagle, Gap, Ralph Lauren and Tapestry saw shares plummet as much as 30 per cent in the wake.