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Tariff & Trade Update
- 7 days ago
- 5 min read
By SPESA
Just Style described it well in its July 27th week in review: “It's been a dizzying week for trade policy, with the U.S. moving on multiple tariff fronts, leaving apparel sourcing executives scrambling to reassess supply chains.”
There have been a lot of recent tariff and trade actions since our last issue of Behind the Seams, mostly coming from the U.S. Government. Please see below for a round-up of the latest news.
General Resources:
Week in Review: The Week Tariffs Went into Overdrive - Just Style | July 27, 2026
‘Read the Fine Print’: What the Tariffs Really Mean for U.S. Apparel - Just Style | July 28, 2026 - This one is especially interesting on what to focus on with new tariff actions
What To Know About the New U.S. Tariffs - Vogue Business | August 3, 2026
Trump's Tariffs Are Sending Some Companies Back to China - The New York Times | July 29, 2026 (Also covered by Fortune)
Forced Labor
On July 23rd, the Office of the U.S. Trade Representative (USTR) announced additional tariffs of 10 or 12.5% (depending on the country) will be imposed on imports from 60 countries following a Section 301 determination that the noted countries have failed to impose or effectively enforce prohibitions on imports of goods made with forced labor. The tariffs basically began immediately.
These new tariffs take effect just as temporary 10% worldwide tariffs (Section 122) expired, and critics say they are less about cracking down on forced labor than they are a way to replace those tariffs. The expired tariffs were themselves a temporary replacement for the IEEPA tariffs the Supreme Court struck down in February. (Check out our recent webinar on that topic here.)
(Meanwhile, the Trump Administration also added 43 companies to the UFLPA entity list.)
Resources:
Brazil
On July 15th, the Trump administration made good on previous threats and issued a notice to impose a new Section 301 tariff of 25% on imports from Brazil over “unfair trade practices.”
Most significant for the sewn products industry, the Office of the United States Trade Representative (USTR) confirmed it will keep its 25% tariff in place on imported footwear from Brazil, despite industry requests for an exemption. During the Section 301 investigation, industry groups and small U.S. retailers argued that alternative footwear suppliers could not replicate the quality and volume provided by Brazilian manufacturers. Several commenters also warned that the increased costs from the tariff would negatively impact small American businesses.
Resources:
U.S. Imposes New 25% Tariffs on Brazil, Expands Exemptions List - Reuters | July 15, 2026
U.S. Upholds 25% Tariff on Brazilian Footwear Despite Industry Concerns - Just Style | July 21, 2026
Section 301 Tariff on Imports from Brazil Takes Effect July 22 - ST&R Trade Report | July 17, 2026
Brazil Condemns U.S. Decision To Impose 25% Tariffs, Vows tT Retaliate - Time | July 16, 2026
Canada
The U.S. Government also announced a 50% tariff on certain imports from Canada — including textiles and apparel — in response to “Canada’s discriminatory treatment of American products.” Significantly, these tariffs apply to all covered goods regardless of whether a good originates under the U.S.-Mexico-Canada Agreement (USMCA). As of now, the new tariffs are set to take effect August 19, 2026.
Some sage advice from Just Style: “Prime Minister Mark Carney’s vow to ‘take any measures necessary’ suggests this is far from resolved, and brands with cross-border supply chains would do well to model worst-case scenarios now rather than wait for clarity that may not come before the August implementation date.”
Thanks to our friends at the Canadian Apparel Federation for breaking down the products: The product coverage captures a wide range of textiles and apparel across Chapters 50-63 — knit apparel (Ch. 61), woven apparel (Ch. 62), and made-up textile articles in various other chapters. Companies that export to the United States should consult this annex to confirm whether their products are covered.
Resources:
More from Just Style that sums up a lot of our feelings:
“Taken together, these moves paint a picture of a U.S. trade policy that is no longer selectively aggressive but broadly, simultaneously aggressive — hitting a NAFTA-adjacent neighbour, a rising sourcing alternative, and dozens of established suppliers all within the same week.
For sourcing executives, the practical question is no longer ‘which country is safe’ but how much margin can we absorb while we wait and see.
What makes this latest wave of announcements different is not any single tariff, but the pace at which the trade landscape is changing.”
Industry Impact
Coming as no surprise, the recent USFIA Fashion Benchmarking Study (see more info in this issue of Behind the Seams) found that 92% of respondents said protectionist trade policies and related policy uncertainty, including the impact of tariffs, were one of their two most pressing business challenges this year.
On the plus side, we did find this interesting Sourcing Journal article that says brands are still sticking with their suppliers despite tariff upheaval. They are just pushing for better terms. “Tariff upheaval has roiled trading relationships on a global scale, but an ongoing dialogue is taking place between brands and their suppliers. In fact, they may be in closer contact than ever before.”
