The Impact of Tariffs on the Textile and Apparel Industry: Between Protection andPressure

Tariffs—taxes applied to the import and export of goods—play a fundamental role in international trade. In the textile and apparel industry, their impact can be both a tool to protect local producers and a barrier that increases the cost of key inputs and reduces competitiveness. Understanding their effects is essential for planning business strategies in an increasingly volatile global environment.

Positive Effects of Tariffs

1. Protection of local industry: Imposing tariffs on imported textile products can shield domestic manufacturers from unfair competition from countries with much lower production costs. This helps boost local employment and strengthen internal value chains.

2. Stimulation of domestic production: By making imported products more expensive, tariffs can promote the consumption of locally produced textiles and garments, encouraging investment in infrastructure, technology, and training.

3. Government revenue: Tariffs also provide income for the state, which can be reinvested in industry support programs, innovation, or sustainability initiatives.

Negative Effects of Tariffs

1. Increased production costs: Many local manufacturers rely on imported inputs such as technical fabrics, machinery, or specialized components. Tariffs on these goods raise costs and reduce profit margins.

2. Lower international competitiveness: When a domestic company has to pay more for inputs or faces trade retaliation, it loses competitiveness compared to global players operating with lower costs and fewer restrictions.

3. Operational and legal complexity: The presence of different tariff regimes, trade agreements, and regulations can create uncertainty and administrative burdens for companies.

4. Impact on the final consumer: Higher costs for producers are eventually passed on to consumers, who end up paying more for textile or fashion products. Short- and Long-Term Impact

Short term: In the short term, tariffs often have immediate effects on the prices of imported inputs, complicate purchasing planning, and increase pressure on operating margins. Companies may react by adjusting prices, renegotiating with suppliers, or seeking alternative sourcing. However, this often entails uncertainty and less operational flexibility.

Long term: In the long run, tariffs can result in structural changes in the supply chain.

Some companies may choose to relocate part of their production, invest in local suppliers, or modify their product portfolios to adapt to new cost conditions. It can also stimulate the development of local capabilities, though without accompanying policies for innovation and training, global competitiveness could be at risk.

Tariffs in the Current Context

With supply chain relocation and rising geopolitical tensions, tariffs have gained renewed relevance. Countries such as the United States, China, Mexico, and members of the European Union have adjusted tariff policies to protect key sectors or respond to foreign measures.

At the same time, agreements like USMCA, the Pacific Alliance, or the expansion of Mercosur have created opportunities to trade without tariffs, requiring companies to stay informed and leverage these competitive advantages.

Conclusion

Tariffs are a commercial policy tool that can either benefit or harm the textile industry, depending on how they are applied and each country’s production profile. For businesses in the sector, it is vital to have a strategic view that incorporates these factors into procurement, sourcing, expansion, and pricing decisions.

In a context of digital transformation and structural change, understanding and anticipating the impact of tariffs can make the difference between growth and stagnation.