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“I’m deeply concerned about this decline and the potential for escalation into a tariff war with a cycle of retaliatory measures that lead to further declines in trade,” Okonjo-Iweala said.

“The announcement of the reciprocal tariffs answered a lot of questions we had, but at the same time, it also creates tons of new additional questions—things like, ‘How long will the tariffs last? Will there be any exclusions?’ And another really big pending question is, ‘How U.S. trade partners respond?’” Dr. Sheng Lu, professor of apparel studies at the University of Delaware, told Sourcing Journal.

According to Lu’s analysis of trade volume data from the U.S. International Trade Commission (ITC), if the value of U.S. textile and apparel imports remains unchanged from 2024, Trump’s new reciprocal duties will result in $35 billion in total tariffs on these products this year—an increase of $19.9 billion.

Companies with particular exposure to Asian markets like Vietnam (now tariffed at a rate of 46 percent), Cambodia (49 percent), China (34 percent), Indonesia (32 percent), India (26 percent) and Bangladesh (37 percent) will face acute hardship in the months ahead, as these countries were among the hardest hit.

This is especially vexing given that January 2025 saw apparel imports from Asia reach a record high, accounting for 77 percent of America’s total apparel sourcing, according to Lu. More than half (56 percent) came from America’s top five apparel sourcing markets: China, Vietnam, Bangladesh, India and Indonesia.

Nike, which produces about half of its footwear in Vietnam and the remainder in China and Indonesia, saw its stock plummet more than 14 percent on Thursday.

Lu believes any price increases at retail aren’t likely to hit in full force until the fall or holiday season, as many brands and retailers have scrambled to frontload orders in the leadup to Trump’s tariff announcement. But with the economy in free-fall and consumer sentiment in the doldrums, appetites for fashion will steadily decrease, and that will likely lead to thinner margins, he said.

“Usually, if consumer demand is very weak, companies naturally will have to offer more promotions, more discounts to attract them to the stores,” Lu added. “So they probably don’t have the power to increase [prices] or fully pass along the tariff burden.”

“We’re talking about kind of a double punishment: they have to be very mindful about how much they increase prices, but will definitely also face higher sourcing costs,” he added. Given the widespread nature of the tariffs—and the mercurial nature of the administration’s trade policy—Lu believes that there’s little option for companies to quickly shift their sourcing to new markets.

American brands and retailers are likely to suffer greatly due to these conditions, he said—and that pain will extend throughout the supply chain. As they attempt to contend with tepid demand, companies may end up canceling orders from offshore partners, just like they were criticized for doing during the pandemic. “Thinking about Bangladesh and some of these developing countries, almost all of their exports are apparel, and the U.S. is their single largest export market,” he added.

And while China’s tariff burden has increased greatly—between the reciprocal duties, baseline tariffs and still-in-place Section 301 duties from Trump’s first term, Lu estimated that the country will actually face a duty burden of about 76 percent—the sourcing superpower is uniquely positioned to weather the storm and may even benefit from other countries’ loss of business.

“China actually has many options. It can use tariffs as well, but I don’t think that’s the most powerful weapon,” he said. The country can, and does regularly, provide its domestic manufacturers with subsidies to up their capacity for production while keeping prices palatable for brands doing business there.

“The Chinese government sees this issue from another angle—a national security angle—and they probably will feel it necessary to provide subsidies to support domestic business. They definitely have the intention and the resources to do that, and they can do it very quickly,” he added.

Doesn’t this fly in the face of WTO rules? Yes, but so do Trump’s trade actions, many would argue. And it was revealed last week that the U.S. suspended its payments to the trade body months ago, putting America’s membership to the preeminent body regulating international trade on shaky ground. “Nobody respects or follows the rule anymore; we’re in chaos,” Lu said. “There’s no traffic light.”

And despite the president’s claims to the contrary, the tariffs are also unlikely to help American apparel manufacturers, many of which rely on foreign-made inputs like fibers and fabrics. Lu applied Trump’s reciprocal duty rates to the value of yarns, fabrics and made-up textiles imported into the U.S. in 2024 and found that if those import values remain the same, the average tariff rate for yarns and fabrics will jump from 6.3 percent to 21 percent, or $1.8 billion spent on duties in a year. For made-up textiles, the tariff rate would jump from 8.4 percent to 28.4 percent, amounting to more than $7 billion in duties.

“More than 70 percent of domestic apparel manufacturers say they use imported materials, especially fabrics,” he said—and much of that volume hails from China. “It’s hard to find alternative sourcing for textile raw materials; these are capital-intensive products, so U.S. apparel manufacturers will face a higher sourcing cost.”

While China may be compelled to artificially deflate the cost of finished goods manufacturing, the country’s government could stick it to American makers by raising prices on fabrics and inputs, or simply forcing them to pay Trump’s reciprocal tariffs. “This definitely will put their businesses at a great disadvantage,” Lu said.

China isn’t the only source for these materials, of course. European suppliers have already been raising prices in anticipation of a trade war, several apparel producers in the Northeast U.S. told Sourcing Journal last month. “I do not think the U.S. domestic textile and apparel industry will be a winner under the current situation,” Lu added.

If there is a victor, or victors, of the new tariff regime, one might argue that the objects of Trump’s recent ire—Canada and Mexico—got off relatively easy.

After teasing 25-percent duties on goods and services from both countries for two months, the president opted to confine the tariff hike to products not covered by the U.S.-Mexico-Canada Agreement (USMCA), which guarantees free trade between the three nations. More than half of the goods sourced from Mexico and two-fifths of those sourced from Canada are USMCA compliant, including textiles and apparel.

“This was not a bad day for Mexican manufacturing,” Jorge Gonzalez Henrichsen, co-CEO of The Nearshore Company, said.

“The new tariffs are poised to make Mexico more competitive by widening the differential with other manufacturing hubs such as India, Vietnam, and China—especially since, as far as we know, USMCA-compliant products are exempt even from the earlier 25-percent tariff, leaving ‘nearshoring’ largely untouched,” he added. “Even if those countries now move aggressively to lower their tariffs on U.S. products—and the U.S. matches those reductions—the outcome would still be positive, as it would lower trade barriers overall—except possibly for China, which would, in turn, benefit Mexico.”

Ruby Dhalla, a former Canadian Liberal Party Member of Parliament, said the trade war with the U.S. has already led to a domino effect of negative impacts on the Canadian economy.

“The tariff trade war has had a very negative impact on the manufacturing sector because our supply chains and our economies are so incredibly integrated,” she said. “Looking at the closure of plants and the loss and the termination of jobs, you see the impact of the trade war on the lives of families, not just in Canada, but America as well.”

As such, “A zero-percent duty would be welcomed,” by Canadians, though Dhalla believes Trump’s messaging on the issue was less than clear.

Instead of volleying increased duties across that Northern border, Canadian and American leadership should be focused—right now, not in July 2026—on renegotiating the U.S.-Mexico-Canada Agreement (USMCA), she believes.

“The correct answer of moving forward to really create a competitive economy in which folks of our countries can win here domestically within North America—and win globally as well against the other economies that are coming forward,” she said.

“Bottom line: the leadership needs to meet. Sit down and negotiate a winning deal the old-fashioned way,” she said. “Zero tariffs are the answer for Canada and the U.S. so we can unite and build an economy in collaboration that can compete with the world.”