Confirmed Tariff Rates by Country

The finalized tariff schedule hits major garment-producing countries hard. Below is a snapshot (effective August 1, 2025 unless otherwise noted):

 (Source: White House Fact Sheets)

These rates are significantly higher than the 10% baseline reciprocal tariff announced earlier in 2025, and they target some of the world’s largest suppliers of textiles and garments.

What This Means for Custom Fashion Businesses

Unlike large global brands that can spread risk and negotiate preferential contracts, custom fashion brands often have fewer sourcing options and smaller buying volumes. This means the increased tariffs can represent a disproportionate cost burden.

The End of the De Minimis Loophole

In a major policy shift, an executive order on July 30, 2025, repealed the de minimis exemption. Previously, packages valued under $800 could enter the country duty-free from most places. Now, every single shipment, regardless of value or origin, is subject to the relevant country’s tariff rate.

This change is a huge deal for custom brands that often import small shipments of specialty fabrics, trims, or samples. The new rule means more duties and more paperwork on every package, slowing down your supply chain and driving up costs even during the prototyping phase.

Impact on Fashion Retail and Custom Fashion

 

1. Rising Costs and Price Adjustments

Brands are already passing on these higher costs (Source: Vogue Business):

• Hermès raised U.S. prices in May to offset the 10% tariffs and is monitoring developments.
• Burberry adopted a “surgical” approach to price increases, managing them by category.
• Adidas has already taken a “double-digit euro-million hit,” with CEO Bjørn Gulden voicing concern about consumer reaction.
• Ferragamo expects tariffs to remain at 15% for now but is prepared to raise prices again if needed.

According to Competitoor, luxury handbag prices have already risen by 4% year-over-year, with some models seeing up to a 12% increase.

For custom fashion businesses, price hikes are more complicated. These brands are built on relationships, reputation, and personal service. Sudden price increases risk alienating long-term clients. Instead, brands will need to explain the direct link between policy changes and pricing to retain loyalty.

2. Double Impact on Custom Supply Chains

Custom houses and bespoke ateliers, which often operate with limited scale and rely on specialty imports, are facing:

• Higher landed costs on every shipment, from fabrics to trims.
• Longer timelines due to more extensive customs procedures.
• Some businesses that rely on basted fitting (where garments are partly made overseas, shipped to the U.S. for fitting, and then returned for finishing) will experience double taxation on import tariffs.

These factors reduce agility, making it harder for small brands to maintain the speed and personalized attention that differentiates them from mass-market players.

How Global Players Are Reacting

Global brands have started adjusting their strategies:

• Supply Chain Diversification: Brands that had moved production out of China into countries like Vietnam and India are now discovering that these new regions face similar tariff rates, complicating previous risk-avoidance strategies.
• Strategic Price Management: Companies such as Burberry are analyzing which products can bear higher prices without losing volume.
• Monitoring Consumer Demand: Adidas has publicly stated that its main concern is the effect on consumer sentiment.
• Patience and Flexibility: Ferragamo, for instance, is waiting to see how long-term policy stabilizes before making significant structural changes.

 

These approaches can serve as a guide for smaller companies: stay agile, plan for different scenarios, and protect relationships with both suppliers and clients.

Broader Market Outlook

According to Bain & Company, tariffs are contributing to a projected contraction of 2% to 5% in the luxury market in 2025, with a 20% chance of a steeper decline. For the first time since the pandemic, Bain has published multiple market scenarios to account for uncertainty.

The consultancy also warns that tariff-driven slowdowns in the U.S. and China are reducing consumer confidence, which impacts discretionary spending — a direct challenge for custom and luxury brands. In practical terms, this could mean fewer clients willing to spend on made-to-measure items or longer decision cycles before committing to a purchase.

Bain also highlights a rising polarization: top-performing brands, those with strong storytelling and authentic value, are holding on better than mid-tier brands. This is a signal for custom houses to focus on building trust and a clear, unique value proposition.

Key Takeaways for Custom Fashion Brands

1. Account for Tariffs in Pricing: Build tariffs and the loss of the de minimis exemption into cost models, so you’re not caught off guard when quoting to clients.
2. Rethink Supply Strategies: Consider batch-shipping goods to reduce frequency, work with customs brokers, and, where possible, explore domestic finishing or local partnerships.
3. Digital Fitting: Invest in 3D design, visualization, and sampling software to cut down the need for shipping physical samples in and out of the country.
4. Plan for Cash Flow: Factor in longer timelines and additional costs. These policies tie up working capital due to duties that need to be paid before goods are released.
5. Educate and Communicate: Make sure clients understand why costs or timelines might have shifted. Clear, proactive communication can strengthen loyalty even during challenging periods.
6. Scenario Planning: Prepare for continued volatility, as numerous reports have indicated that 2025 will remain a year of uncertainty.

 

The Bottom Line

With higher tariffs across key sourcing regions and the end of the de minimis loophole, U.S. custom fashion businesses face increased costs and operational complexity. Those that adapt through strategic sourcing, digital tools, and transparent communication will be best positioned to navigate this new landscape.

The coming months will be a true test of resilience: balancing creativity and craftsmanship with a clear-eyed business approach will separate those who adapt from those who struggle to survive.