Ruth MacGilp, Fashion Campaign Manager
2025.05.06
Last month was characterized by chaos. As the United States declared ‘reciprocal’ import tariffs on fashion’s most critical sourcing countries, and stock prices plunged, the future of the industry was spun into instability. The eye-watering tariffs, even as various delays and changes have since been negotiated, have in turn exposed a fundamental reality to uninformed consumers: brands don’t make their favorite products; manufacturers do.
Soon after the news broke that China could face up to 245% price hikes on imports to the US, TikTok instantly flooded with Chinese creators sharing videos from manufacturing hubs about the ‘hidden truth’ of inflated retail prices on items like luxury handbags. As a result, millions of viewers worldwide discovered that the items they buy for $500+ might cost less than $5 to make. Carefully crafted images of luxury products being handcrafted by artisans in charming European villages by artisans are being shattered. In response, luxury trade groups have called the TikTok videos a “flagrant case of promoting counterfeiting.”
Beyond exposing the origins of many consumer products and encouraging shoppers to bypass luxury labels, this viral social media moment is shining a light on a fashion system that is stacked against the very people who make it possible. Over the past few weeks, much has been written about the expected knock-on effects of Trump’s tariffs, including a redrawing of fashion brands’ sourcing maps that could have negative impacts for millions of garment and textile workers, as well as the potential deceleration of environmental sustainability efforts.
But does political uncertainty mean corporate climate action should be abandoned? Let’s explore how brands can build from here to ensure supply chain partnerships remain strong and sustainable.
Behind the curtain of fashion’s supply chain
As we’ve explored in previous blog posts, the fashion supply chain can be broken down into four or more different tiers, from raw material to finished product. The average garment goes through multiple manufacturing and processing stages in multiple countries long before it reaches the shop floor or online store.
The penultimate stage of this journey — where, for example, a t-shirt is stitched together — is usually the country we see on the ‘Made in X’ label on our clothes. And importantly, this stage accounts for a tiny portion of the total retail price paid by customers, with a much bigger chunk going to the brands’ profit margins. Of course, the true cost would be a whole lot more if it took into account paying real living wages and managing environmental impacts, exposing the imbalance between who profits and who pays.
According to the World Trade Organization, China, Bangladesh, and Vietnam collectively accounted for almost half of global apparel exports. For example, in Vietnam, Nike produces around half its footwear, while Lululemon sources at least 40% of its products from the country. For these countries, now facing some of the highest US import tariffs, the US represents the largest single location for apparel exports.
This means that major fashion brands are facing potentially significant increased costs, which may be passed onto consumers or squeezed from suppliers. Viral videos from TikTok creators like @LunaSourcingChina have been encouraging customers worried about higher prices to buy so-called ‘identical’ products from brands like Lululemon directly from suppliers for a much lower cost. Without question, consumers are feeling personally ripped off — but ultimately it’s workers and the environment that are paying the price.
What do fashion’s unbalanced power dynamics mean for the climate?
Some of the richest people (men) in the world sell fashion for a living, like Zara’s Amancio Ortega, Louis Vuitton’s Bernard Arnault, and Amazon’s Jeff Bezos. Billionaires have some of the world’s most undervalued workers to thank for their fortunes, and yet, big brands are often the first to claim that supporting their suppliers in the Global South to transition from fossil fuels to renewable energy is too expensive.
Fashion’s addiction to chasing the lowest possible production costs – not to save consumers money, but to fatten up their profits – is directly linked to the climate crisis. With little incentive to invest in decarbonisation, brands enable supply chain emissions (which comprise up to 99% of their total carbon footprint) to skyrocket, while expecting manufacturers to pick up the bill. Switching to clean energy often requires a level of upfront investment that manufacturers, already operating on razor-thin margins to keep prices artificially low, can rarely afford out of pocket.
What’s more, brands regularly switch suppliers due to factors like shifting product assortments, increased labour and regulatory costs, and global macroeconomic conditions, despite the resilience and security built through strategic supplier relationships. This means that without long-term contracts that offer guarantees of future orders, manufacturers are hesitant to invest in decarbonisation projects with longer payback periods, while brands often don’t stick around for long enough to implement the most impactful climate solutions in collaboration with specific suppliers.
Where should brands go from here?
As consumer awareness grows and tariffs put profits under pressure, retailers have a choice to make: cling to a splintered system, or help build something better. For decades, labour and environmental groups alike have been calling for improved purchasing practices, which could translate to a fundamental shift from extractive to collaborative supply chain relationships.
To accelerate meaningful climate action in the fashion industry, the most effective approach for brands is long-term investment for real, tangible results. This means:
- Establishing long-term partnerships with core suppliers through fair and equitable contract terms and progressive incentive structures.
- Collaborating with suppliers on financial mechanisms to unlock suitable decarbonization solutions for their context.
- Proactively fund new technologies, feasibility studies, supplier training, and pilot projects to help suppliers overcome technical and regulatory barriers.
- Work in partnership with other brands sourcing from the same suppliers and regions to share costs and learn from best practices.
Overall, while this unique moment is exposing cracks in the fashion system, it is not broken: it is by design. As politics continues to shift the status quo of global trade, major fashion brands still have the money, the influence, and the moral responsibility to help drive the shift from an exploitative, extractive industry that takes advantage of customers, suppliers and the environment, to one that truly serves people and the planet.
The good news? People like you — customers of these brands — hold more power than you think to pressure companies to make meaningful change. Join Action Speaks Louder as we call on fashion brands to step up for a just, green future.
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