In April 2025, the U.S. enacted sweeping and arbitrary “Liberation Day” tariffs on imports, signalling a substantial increase in tariffs across key apparel, footwear and home textiles in key sourcing countries. And while they were swiftly followed by a 90 day pause, it is clear that the sector will continue to face increased uncertainty and costs.

As witnessed during the Covid-19 pandemic, the costs of supply chain shocks are often passed onto suppliers, and in turn workers, as brands responded to the emerging crisis in 2020 by abruptly cancelling, reducing or withdrawing orders with suppliers, and demanding retroactive discounts leaving factories and workers without recourse. The Business & Human Rights Resource Centre therefore reached out to the top 25 fashion brands importing into the U.S. to understand how they are responding to the impact of tariff uncertainty to ensure that their purchasing decisions protect jobs and that human rights due diligence linked to any change is undertaken in real time.

Impact of tariffs in sourcing countries already emerging

BHRRC has monitored emerging impacts of the threat of tariffs- and brands’ response- across apparel producing countries. In China, suppliers have reportedly been told by US buyers to cut prices to offset the cost of the tariffs, in one instance as much as half the cost of the tariffs, with the supplier reportedly seeing delays in orders and a loss in business after attempts to negotiate. In Bangladesh, American buyers have reportedly halted ongoing shipments (in some cases worth hundreds of thousands of dollars),instructed suppliers to pause mid-production and asked factories for price discounts to offset tariff impacts. In Vietnam, the fallout has included postponement and cancellation of orders, with some factories already reducing operations to three-day weeks as order volumes decline. India’s home textiles industry is reportedly the ‘worst hit’ segment of its textile industry, with orders worth at least $2 billion reportedly being subject to negotiations or suspended. And while the US’s long term tariff policy is yet to be fully understood, it is clear that such disruption will continue. This will require brands to undertake their own monitoring of the human rights impacts of such changes along their supply chains. Likewise, in situations where factories close and workers are laid off as a result of the increased US import tariffs, brands should negotiate enforceable, binding and worker-driven agreements to ensure workers are paid their owed severance.

BHRRC outreach to top fashion brands

The Resource Centre has reached out to the top 25 fashion companies importing into the US, to understand how they are responding to the impact of tariff uncertainty (see below). This includes how they are ensuring in their planning that support continues to be provided to suppliers along supply chains, and what measures are being put in place to centre continued support for worker livelihoods.

However, not a single brand answered the survey to provide information on their sourcing strategies. adidas, Fast Retailing, H&M, Inditex, LVMH, Nike, Shein, provided general statements without giving information on how they are responding to this specific tariff issue. Abercrombie & Fitch, American Eagle Outfitters, Cintas, Gap, Levi, Kohl's, Macy's, PVH, Target, TJX, Under Armour, Urban Outfitters, VF Corp, Authentic Brands, Walmart and Victoria's Secret did not respond at all. Ralph Lauren and Lululemon declined to respond.

At a time when suppliers and workers are grappling with uncertainty, it is beholden on international fashion brands to centre transparency and accountability in relation to the impact this is having on their business and in turn how they will ensure- through rigorous due diligence- that their purchasing practices are not harming suppliers and workers along the supply chain. The Resource Centre will therefore continue to monitor changes to the global tariff regime and its impact on apparel producing countries, and likewise continue its company outreach and engagement to provide brands with an opportunity to provide further information on how it will ensure that any business changes are not disproportionately passed onto workers.

Questions asked to brands

1. With respect to orders placed with suppliers prior to April 1, 2025, has your company done any of the following, relative to the terms agreed when the orders were placed? Please share any further details.
   a. Requested or imposed price reductions or rebates
   b. Requested or imposed reductions in order volume
   c. Requested or imposed delays in the date of shipment
   d. Requested or proposed altered payment terms or a delay in payment beyond the originally agreed date or dates
   e. Cancelled orders
2. Going forward, concerning orders placed prior to April 1, 2025, is your company committed to honouring for all such orders the terms agreed when they were placed, meaning that your company will not request or impose any of the following: price reductions or rebates, reductions in volume, delays in shipment date, alteration of payment terms or delays in payment date, or cancellation of orders? Please share any further details.
3. For new orders that your company is placing in 2025 (after the receipt of this letter), is your company committed to paying suppliers prices no lower than for like product during the prior season? Please share any further details.
4. Given the initial patchwork of tariffs imposed on apparel sourcing countries on 2 April 2025, and the possibility for future tariff regimes at varying rates across sourcing countries, have you transferred, or do you anticipate transferring, orders from one country to another in 2025? Please share any further details.
5. Can you confirm that to ensure the jobs and livelihoods of workers at your supplier factories are protected:
   1. In circumstances where factories lay off workers, you are committed to ensuring that workers receive the full severance pay legally owed to them?
   2. Your company will instruct suppliers to make sure that any layoffs do not disproportionately target unionised workers.