Apparel retailers delay orders, freeze hiring as tariffs take effect
U.S. clothes and accessories shops are delaying orders and suspending employment in response to tariff increases on products imported from Vietnam and China that go into effect on Wednesday.
These companies, such as Nike and Lululemon, face an untenable choice: offset the cost of the tariffs by boosting prices by 40% (which may impact sales) or absorb the extra costs and further reduce their already thin profit margins.
However, unlike their larger competitors, smaller apparel and footwear makers lack substantial supply chains, leaving them heavily reliant on Vietnam and China.
The Footwear Distributors and Retailers of America, whose members include Nike, Walmart, Skechers, and Deckers, projected that a $155 running shoe made in Vietnam would have to be priced up to $220 in U.S. retailers to compensate for the 46% tax.
