How European fashion brands are responding to US tariffs ahead of peak 2025

For months, US tariffs have been front and center for fashion brands. During the 90-day U.S–China tariff truce, the prevailing advice was to “control the controllables.” 

Now, the picture is clearer and it’s time to act.

US tariffs—where we’re at*

Here’s a snapshot of the current tariff landscape:

• Reciprocal tariffs remain high: U.S. tariffs on Chinese imports are currently held at 30%, while Chinese tariffs on U.S. goods sit at 10%.

• De minimis exemption abolished: From August 29, 2025, imports valued at or below $800 are no longer exempt from duties, regardless of origin.

• Truce extended until November 10: Current tariff rates will remain at 30% on Chinese imports, delaying planned increases of up to 145%, but leaving a tight window for action.

These changes mean that for fashion brands, waiting and watching is no longer an option—proactive planning is critical to protect profit margins during the 2025 peak season.

*accurate as of 20 August 2025

Preparing for peak season: 5 key action points

1. Import early

If possible, try to schedule the landing of Q4 and Q1 2026 stock before November 10 to avoid steep tariffs. Early shipments will reduce last-minute delays and protect your margins.

2. Factor in congestion

Freight rates are expected to spike as ports and warehouses scramble to handle early shipments. Lock in capacity now and coordinate with suppliers.

3. Shift your fulfilment strategy

Using U.S.-based 3PLs or local warehouses enable brands that import in bulk to pay duties on the wholesale value of goods, rather than the retail price.  Temporary local hubs can handle high-demand items efficiently.

4. Run cost scenarios

Compare landed costs for October versus November arrivals, including duties, shipping, and warehousing. In many cases, early imports deliver significant savings.

5. Messaging matters

Decide how tariffs should factor into your wider customer communications. Some brands have made the difficult decision to raise their prices, and have communicated the changes to their customers through multiple marketing channels and on-site banners. Others have added tariffs as a line item in the checkout. Whatever way tariffs are going to be incorporated into your pricing model (or not, although that is becoming a less-common strategy), it’s vital to keep your customers fully informed of the changes. 

While these five immediate actions focus on mitigating short-term risks during peak season, brands also need to consider broader, strategic approaches to navigate US tariffs sustainably.

Long term strategy: ways to tackle US tariffs

There’s no one-size-fits-all approach here. Every brand needs to take a hard look at where they stand before figuring out the path that makes the most sense. For most, it’ll end up being a combination of a few strategies.

Pricing recalibration

Review pricing and margins to figure out how much of the tariff impact can or should be passed on to customers. Focus on total cash contribution, not just percentage margins. Try some price elasticity testing to see what the market can bear—test, learn, and adjust as needed.

Diversifying supply chain

Supply chain changes don’t happen overnight, so now is the time to consider exploring alternative production locations like Morocco (which faces a 10% tariff). Regardless of how things evolve with tariffs, there will come a time when sourcing from China won’t be the most efficient option. Speed up that transition.

Market reallocation

Some brands with a lower market share of their overall revenue in the US are choosing to shift resources away from the US market towards EU, UK, and Australia where trade conditions are more favourable. If a brand isn’t heavily reliant on the US market, it’s a fortunate position to be in. However, the other side of the coin is that the UK and Europe market will get more competitive as a result of this, driving marketing and customer acquisition costs up. 

Inventory relocation

Working with 3PLs in the US allows brands to import at cost price rather than retail price. This is especially helpful for brands that have a high percentage of revenue coming from US customer spend, and for many, it may be the only way to make the US share of a business viable. This is the most prevalent, immediate reaction to reduce US duties. 

Bonded warehouse

Some brands are also exploring bonded warehouses with their 3PL partners, which allows them to defer duty payments until point of sale, improving cash flow as a result.

The bottom line

Successfully navigating US tariffs demands both swift action and thoughtful long-term strategy. By recalibrating pricing, diversifying supply chains, and optimizing inventory, proactive brands can safeguard margins and sustain momentum through peak season.

Luke Hodgson is global tech leader and co-founder of Commerce Thinking, providing tech strategy for New Luxury brands, such as Adenola, Nobody’s Child, and Liverpool Football Club. For more insights from Luke Hudgson, subscribe to Commerce Thinking’s newsletter.

Greg Thorndick is the Director of Global Trading & Ecommerce at We Are Whānau, an advisory investment consulting business that helps scale-ups with international aspirations. Follow Greg on LinkedIn.