"Responsible business conduct amid Trump’s trade war", 11 April 2025

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While the Administration has since pressed pause on most tariffs – setting them at 10% for most countries and giving them 90 days to negotiate new deals – reactions by businesses are already affecting workers making the worlds’ goods...

In spite of this uncertainty, responsible businesses must consider how workers throughout their supply chains could be affected, and work in partnership with buyers, suppliers, workers and their representatives to limit the potential harm caused.

...countries like China, Cambodia, Bangladesh, Sri Lanka, Vietnam and India, for whom the US is a major trading partner...face the worst effects if these tariffs withstand the next 90 days. Reports of US clothing retailers immediately delaying orders and demanding suppliers absorb the costs of tariffs have already made headlines. These actions place increased pressure on suppliers to reduce costs and stay competitive, placing workers at even greater risk of human rights violations in an industry where low wages, long hours and other forms of abuse are already far too common. After several years of high inflation, this downward pressure will have devastating impacts for workers and their families.

...businesses have a responsibility to adhere to international labour standards, as captured in the ETI Base Code, and apply the UN Guiding Principles, particularly during periods of heightened human rights risks.

ETI urges all responsible businesses to:

• Engage responsible sourcing teams, commercial teams and suppliers, to understand the potential impacts of tariff announcements on business operations and workers.
• Consider how any business response to tariff announcements would impact workers in the supply chain. Ensure this assessment informs business decisions, with the aim of preventing negative impacts to workers, and is carried out before action is taken.
• Where order adjustments are needed, ensure these are manageable and realistic, and in line with ETI’s recommended responsible purchasing practices.

Give particular consideration to:

• Suppliers’ need for stability in commercial relationships to provide stable employment for workers.
• Suppliers’ financial fragility in a context that is already challenging and volatile, and the amplified impact of any business commercial decisions.
• The impacts of tariffs on product costing and ability to pay wages.
• The need to go above and beyond contractual agreements, which are typically not sufficient to protect workers from negative impacts.
• Meaningful stakeholder engagement to build a comprehensive understanding of potential impacts.

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Knee jerk cancellations, reductions and delays have real negative impacts for low-income workers with limited financial and social protection, and these impacts hit harder for women and marginalised groups. But it’s also bad business, because suppliers remember well who stands by them in difficult times...