Navigating the New Tariff Landscape: What U.S. Lifestyle Brands Need to Know

The US & Global Trade

An image of the earth superimposed in front of the American flag

On April 2, 2025, the White House released a new Executive Order introducing sweeping changes to U.S. trade policy, particularly with regard to import tariffs. With the goal of addressing the nation's longstanding trade deficits, the policy enacts a baseline 10% ad valorem tariff on most imports and additional, country-specific tariffs for nations with significant trade imbalances, including China. This new tariff regime presents major implications for U.S.-based lifestyle businesses that rely heavily on international supply chains.

At Folta Consulting, we specialise in guiding lifestyle brands through global market shifts. This update is particularly relevant for our clients in fashion, apparel, and consumer goods who source from overseas partners.

Key Takeaways from the Executive Order

• A 10% tariff will apply to almost all imports into the U.S. starting April 5, 2025.

• Additional tariffs apply to countries listed in Annex I, such as China, with rates up to 60% depending on product categories and trade imbalances.

• Certain goods listed in Annex II, including critical minerals, energy products, and some industrial materials, are exempt.

• The goal of the policy is to "rebalance global trade flows" and reduce U.S. dependence on imports from countries engaging in non-reciprocal trade practices.

How This Impacts U.S. Lifestyle Businesses

Lifestyle and fashion brands that import textiles, apparel, footwear, and accessories from countries like China will likely see significant increases in import costs due to the new tariff structure. As materials like nylon and polyester are not exempt under Annex II, and China is subject to some of the highest tariff rates, businesses in this space must brace for higher overhead.

For our clients at Folta Consulting, this change could:

• Increase product costs by 10% to 60% depending on origin and material.

• Disrupt established supply chains, particularly for fast fashion and seasonal collections.

• Lead to higher retail prices or reduced profit margins if cost increases are absorbed rather than passed to consumers.

Implications for E-commerce and DTC Brands

Direct-to-consumer (DTC) and e-commerce brands are particularly sensitive to cost fluctuations due to their reliance on competitive pricing and high customer acquisition costs. The new tariffs will likely:

• Require businesses to adjust pricing structures, potentially resulting in higher prices for consumers.

• Affect profitability, especially for brands operating with tight margins.

• Create pressure on logistics and fulfillment strategies, especially for imported goods with long lead times.

Ultimately, while brands may initially absorb some of the costs, sustained tariff increases will be passed on to the end consumer, making transparency and value communication even more critical in maintaining trust and loyalty.

Examples of Folta's Strategic Recommendations to Navigate the Tariff Shift

1. Reevaluate Supply Chains

   • Explore alternative manufacturing countries not listed in Annex I, such as Vietnam, Mexico, or Bangladesh.

   • Explore manufacturing alternatives with Resonance.

   • Consider nearshoring or reshoring options where feasible.

2. Reengineer Product Lines

   • Shift material sourcing away from tariff-heavy inputs like polyester and nylon.

   • Invest in sustainable or alternative fabrics that may be locally sourced or exempt.

3. Enhance Pricing Strategy

   • Implement value-based pricing to justify potential retail price increases.

   • Clearly communicate value propositions to customers, especially around quality, sustainability, and domestic support.

4. Leverage Trade and Legal Support

   • Work with trade compliance experts to navigate exemptions and future regulatory shifts.

   • Stay updated on future actions related to the Trade Expansion Act or similar legislation.

5. Invest in Brand Loyalty

   • Strengthen your brand community to reduce sensitivity to price changes.

   • Highlight transparency, ethical sourcing, and local job creation in marketing efforts.

Conclusion

The 2025 reciprocal tariff regime marks a pivotal shift in how the U.S. conducts international trade, with significant implications for lifestyle and fashion businesses. By proactively adjusting sourcing strategies, rethinking pricing, and reinforcing customer relationships, U.S. brands can weather the turbulence and emerge more resilient in an evolving global market. Likewise internationally based brands, outside of the US, can take action to ensure their existing US customers have transparency in the supply chain. Fact is, this marks a monumental change in the global e-commerce and DTC landscape, however it is not all doom and gloom and careful analysis and adaptation of supply chain, markets and margins will allow your brand to continue on its growth journey.