As U.S.–China tariff escalations ripple across the fashion industry, brands from startups to heritage houses are scrambling to adapt. The new policies, including the rollback of the de minimis exemption and intensified duties on Chinese imports, have created a chilling effect on global logistics and sales. While some brands are rethinking supply chains and pricing strategies, others are left with few viable alternatives. Across the board, clarity is scarce and margins are thinner than ever.
“This is effectively an economic Cold War,” said Juan Pellerano, CMO at logistics platform Swap. “Tariffs aren’t just back, they’re evolving. Brands need to treat compliance and cost mitigation like a daily discipline.”
For its part, Swap pivoted quickly. In anticipation of renewed tariffs under a second Trump administration, the company launched Clear by Swap Global on April 10, a service tailored to brands navigating the shift from direct-to-consumer to more complex B2B2C models. “We wanted to bring enterprise-level logistics tools, like tariff recalculations and compliance, down to mid-market DTC brands operating on platforms like Shopify,” Pellerano said.
One brand strategy recommended by Swap is to reframe how their imported goods are valued at the point of entry. Under U.S. trade law, tariffs are typically applied to the declared value of goods. Swap helps clients apply duties to either the wholesale price or the “fair market value,” essentially what one legal entity (such as a U.K. office) charges another (its U.S. counterpart) for the same product. Instead of taxing a $100 hat at full price, for example, brands can declare a $20 intercompany transfer and reduce duties substantially. It’s legal if the transfer price reflects fair market value and complies with customs and tax regulations. Swap is working with clothing brand Hera and fashion brand Never Fully Dressed, among others.
“It’s about avoiding death by markup,” said Pellerano. “We’re talking about saving businesses.”
For fashion brand Rumored founder Dacey Trotta, such a lifeline couldn’t come soon enough. The eight-figure brand, which started in a basement and now counts Taylor Swift and Britney Spears as fans, saw its 400% wholesale growth come to a screeching halt after tariffs wiped out margins overnight. “We had to back out of orders with major retailers and pause all future production,” Trotta said. “We’re just trying to survive.”
Rumored has long relied on Chinese manufacturers because of their low minimums and craftsmanship, factors that allowed a bootstrapped brand to scale responsibly. But with tariffs increasing daily and the de minimis exemption coming to a halt on May 2, importing products became too risky. The de minimis exemption previously permitted duty-free shipments under $800.
“We’re not a billion-dollar company that can absorb this, and we don’t have the capital to flip supply chains overnight,” Trotta said. “Our manufacturers are partners — we’ve worked with them for years. These are people we trust, not just transactions.”
Relocating production isn’t just expensive, but it’s also often infeasible. “There’s this misconception that moving to domestic production is a plug-and-play fix,” said Irene Chen, co-founder of the California-based accessories and bags brand Parker Thatch. The brand was founded in 2001, and as of 2024, it has achieved eight-figure annual revenue. Chen was the director of product development at Donna Karan before founding the brand. “Our leathers, zippers, rivets and all the hardware are imported,” she said. “So even when we produce bags domestically, we’re still exposed.”
Parker Thatch, which makes more than half of its products in the U.S., is feeling the pinch at the component level. “Everyone’s panicking, trying to stockpile materials,” said co-founder Matt Grenby. “But as a small business, hoarding inventory just ties up too much cash.”
Instead, the brand is focusing on selective overstocking of essentials, like brass metal clasps, particularly for its fall and holiday collections. “It’s triage. Buy for the things you know you’ll use, stabilize for six months and then reassess,” Grenby said. “And be transparent with your customers.”
Chen, who connects with customers daily through Instagram and YouTube, has found that transparency is one of the brand’s best defenses. “We explain how our bags are made, where components come from and why prices might change,” she said. “That level of dialogue builds trust. It’s what keeps people coming back.”
Swap reports that 55% of its brand partners are revisiting pricing strategies, with some even labeling extra costs as “tariff surcharges.” Sex toy brand Dame went viral on social media for selling a Trump-themed wig as a protest against duty-driven markups.
According to Jackson Wood, director of industry strategy and global trade intelligence at Descartes, that blend of education and creativity is critical. “Visibility is the first step,” said Wood. “Brands need to understand their own supply chains, including who they source from, where risk exists and how to build resilience.”
That may mean rethinking sourcing countries, engaging customs brokers or exploring free trade agreements. Another option is using foreign trade zones, which are designated areas near ports where imported goods can be stored or assembled without triggering tariffs until they enter the U.S. market.
“For small brands, using foreign trade zones or taking advantage of tariff engineering strategies isn’t intuitive,” Wood said. That’s because it requires complex compliance, supply chain adjustments and trade expertise that many don’t have in-house. “But the right partner, whether a freight forwarder or broker, can guide that setup within days.”
Some brands have successfully used FTZ to get around tariffs. Helly Hansen, the Norwegian outerwear brand, started using a U.S. foreign trade zone back in 2011 to get ahead of mounting tariff costs. By setting up operations in FTZ-5 at the Port of Seattle, the brand was able to defer or avoid duties on goods, including those headed to Canada, which made up more than half of its U.S. imports.
Wood also recommended tapping into any trade associations or collectives that the brand may be part of. “If you have membership in an association or some kind of industry group, ask whether they have relationships with customs brokers or freight forwarders,” he said. “Any way that you can multiply your leverage — by banding together or accessing shared resources — can make a difference.”
That shift from scrappy independence to strategic collaboration marks a change in mindset. “The days of flying solo through global trade are over,” said Wood. “Now is the time to call in help, whether it’s from your freight partner, your tech stack or your community.”
For brands that once thrived on just-in-time logistics and Shopify-led agility, the move toward bulk inventory and long-range planning represents a major pivot. “We’re seeing more brands consider opening warehouses and hiring inventory managers,” Wood said. “De minimis made [international trade] easy. Now, it’s a different game.”
That new game favors the well-prepared. Brands that diversified production or maintained domestic infrastructure are more insulated, but even they aren’t immune. “We’re already seeing increased competition for U.S. manufacturing resources,” said Chen. “The big players are coming in, and we worry smaller brands like us will be pushed out of the factories we’ve worked with for years.”
At Rumored, the mood is one of urgency and defiance. “We did everything right,” Trotta said. “We grew responsibly, hired locally and kept our production lean.”
In response, the brand is slashing expenses, pausing all new product drops and speaking out. “There’s so much misinformation. Most people don’t even understand what a tariff is,” she said. “Until we start educating consumers and holding policymakers accountable, small brands like mine will keep getting shut out of the conversation.”
At Swap, Pellerano sees this as a call to action. “We’re telling every brand we work with: Don’t wait. Build optionality into your supply chain now, because this isn’t going away.”
