The short version: Clothes imported into the US now pay their normal customs duty plus a 10% or 12.5% Section 301 tariff in force since 24 July. Because retailers price on percentage margins, each extra dollar of duty can add about $2.50 to the tag. A former chief US textile negotiator expects more tariffs after the 3 November midterms.
Ask why a plain cotton T-shirt costs more than it did two years ago and the honest answer has three parts: the factory price, the duty paid at the border, and the arithmetic a retailer applies on top. The second part has been rewritten four times since February. On 20 February the Supreme Court ruled 6–3 in Learning Resources, Inc. v. Trump that the tariffs imposed under the International Emergency Economic Powers Act (IEEPA) exceeded presidential authority, according to Thomson Reuters. A temporary 10% global surcharge under Section 122 of the Trade Act of 1974 replaced them from 24 February until it expired on 24 July. Since then, clothing has carried new Section 301 tariffs set by the Office of the US Trade Representative (USTR).
Here is what applies now, how a tariff turns into a price, and what it means for how you buy.
What tariffs apply to clothing imported into the US right now?
Imported clothing pays two layers: the ordinary duty every garment has always paid, and the Section 301 tariff added on 24 July. The ordinary duty, known as the most-favoured-nation or MFN rate, varies by garment and fibre, from nothing to more than 32%, according to the import-cost consultancy Eightx. A cotton knit T-shirt is a typical 16.5%, and woven cotton lines often run a few points higher than their knitted equivalents.
The second layer came from USTR’s investigation into whether trading partners block imports made with forced labour. According to a 30 July analysis by the law firm Holland & Knight, the tariffs took effect at 12:01 a.m. Eastern on 24 July across 60 economies. Major clothing suppliers fall into these groups:
One. A flat 10% on top of the ordinary duty for 17 partners including Bangladesh, Cambodia, India, Indonesia, Pakistan, Sri Lanka and the United Kingdom.
Two. A flat 12.5% on top for the remaining economies investigated, including China and Vietnam. Chinese apparel also still carries an older 7.5% Section 301 tariff on what is known as List 4A, according to Eightx.
Three. A combined ceiling, counting the ordinary duty, for some partners: 10% for the European Union and Taiwan, 12.5% for Japan, South Korea and Switzerland.
Four. Exemptions for goods qualifying under the US–Mexico–Canada Agreement, which keeps qualifying garments from Mexico and Canada out of the new layer, plus textile tariff-rate quotas for Bangladesh, Cambodia, Indonesia and Malaysia, to start no earlier than 1 September, Holland & Knight reports.
For most of those countries, the new rate is lower than the IEEPA rate it replaced. Holland & Knight lists Bangladesh down from 19% to 10%, Vietnam from 20% to 12.5%, and India from 18% to 10%. Lower is not low: it sits on top of a duty that was already in the mid-teens for much everyday clothing.
How did the rules change so many times this year?
Courts and statutory time limits forced each change. After the Supreme Court’s February ruling, US Customs and Border Protection stopped collecting the IEEPA tariffs within hours, Thomson Reuters reports, and opened a portal called CAPE in April for importers to reclaim them. Thomson Reuters cites a Penn Wharton estimate of $166 billion to $179 billion in duties and more than 333,000 importers in scope.
The Section 122 surcharge that followed was capped by law at 150 days. On 7 May the US Court of International Trade ruled 2–1 that it exceeded the president’s authority, according to PwC, but an appeals court stay kept it in place until it lapsed on 24 July. Importers’ representatives challenged the new Section 301 tariffs in the same court on the day they took effect, Holland & Knight notes. That case is pending.
How does a tariff become a higher price on the tag?
A tariff is charged on the import value of a garment, but shops price on a percentage margin, so the duty gets multiplied on its way to the shelf. Three steps explain it.
One. The duty is paid on the import value. The US importer — the brand or retailer, not the factory abroad — pays it to US Customs when the goods arrive.
Two. The duty becomes part of landed cost. Eightx defines landed cost as the factory price plus duty, freight, insurance and brokerage, spread across the units shipped.
Three. The margin multiplies it. Eightx puts gross margins for direct-to-consumer clothing brands at roughly 50% to 65%. A brand that wants to keep a 60% margin has to charge two and a half times its landed cost. Every extra dollar at the border becomes about $2.50 at the till.
Here is an illustration, with round numbers chosen for clarity rather than taken from any brand. Take a cotton knit T-shirt that leaves a factory in Vietnam at $12. The ordinary 16.5% duty adds $1.98. The 12.5% Section 301 tariff adds another $1.50. If the brand passes that $1.50 through and keeps a 60% margin, the shelf price rises by $3.75 — before anyone has paid more for cotton, freight or wages.
That is why tariffs feel larger in the shop than the headline percentage suggests. Some brands absorb part of the increase to protect sales; others use it as cover for rises they wanted anyway. You won’t see which from the tag.
Why do some clothes rise more than others?
Three things decide how hard a tariff hits a garment: where it was made, what it is made of, and how much margin sits in its price. Origin sets the Section 301 rate. Fibre and construction set the ordinary duty, which is why the make and fibre of a wool coat can matter to its price before you even reach the shop. And the size of the margin decides whether a brand can absorb the cost or has to pass it on.
A brand selling at thin margins and high volume has the least room. A brand with a fat margin and a loyal customer has the most room to absorb the cost quietly.
What happens after the midterm elections?
More tariffs are the likelier direction than fewer. Ron Sorini, a former chief US textile negotiator, told an audience at the Functional Fabric Fair in Portland on 27 October that US apparel tariffs were likely to rise after the midterms whatever the result, according to Ecotextile News. “The president will be announcing additional tariffs,” he said. He and a second Washington trade veteran expected only limited exemptions, including targeted relief for products made with US cotton.
There is also a second USTR investigation under way into manufacturing excess capacity in 16 countries, which could produce tariffs stacked on the current ones, Holland & Knight reports. And the court challenge to the July tariffs could still change the picture. Anyone planning a large purchase should assume the current rates are a floor, not a ceiling.
How are shoppers responding?
Many are buying secondhand instead. In OfferUp’s eighth annual Recommerce Report, produced with GlobalData and reported by Just Style on 27 October, 51% of US shoppers surveyed said tariff-related price rises had led them to consider secondhand instead of new, rising to 66% of Gen Z. 44% said they check resale options before buying anything new over $100.
Where this leaves you
A tariff is a tax on the act of importing, so the cheapest way to avoid it is to buy what is already here. A coat already hanging in an American wardrobe pays no new duty when it is resold within the country. That makes vintage and estate pieces the most tariff-proof channel there is. If you go that route, learn how to check a designer bag before buying secondhand, because the savings disappear if you buy a fake.
The math compounds in a second way. If tariffs push the price of a new garment up by a fixed multiple, the cost of buying the wrong thing rises with it. Fewer, better purchases — from independent designers and craft workshops who can tell you where and how a piece was made, from accessible-luxury brands whose construction justifies the price, and from selective mainstream luxury bought piece by piece — protect you better than chasing the lowest tag. Skip the mid-tier mass market, where tariffs land on garments that were never built to last long enough to justify paying more.
Frequently asked questions
Who actually pays clothing tariffs?
The US importer of record pays the duty to US Customs and Border Protection when goods enter the country. Whether that cost then reaches shoppers depends on how much the brand or retailer passes through in its prices.
Do tariffs apply to secondhand clothes?
Not to clothes that are already in the US and resold there. Used clothing imported from abroad is still an import and goes through customs like any other goods.
Are clothes made in Italy or France tariffed in the US?
Yes. Under the July rules, goods from the European Union face a combined 10% rate that counts the ordinary duty towards it, according to Holland & Knight. Check a garment’s exact classification, because ordinary duties differ by fibre and construction.
Can I get a refund for tariffs I paid on clothes?
Refunds of the struck-down IEEPA tariffs go to importers through Customs’ CAPE process, not to shoppers who bought the goods, according to Thomson Reuters’ account of the scheme.
Why do two similar shirts pay different duty?
Ordinary US duties on clothing depend on the fibre and the construction, ranging from nothing to more than 32%, according to Eightx, and woven cotton often pays a few points more than knitted cotton. The country of origin then sets the Section 301 layer on top.
The price on the tag is a stack of decisions made in Washington, in customs offices and in a finance department. The one decision still entirely yours is whether the garment is worth it.
The next move is yours.
Sources: Holland & Knight, Section 301 tariffs · PwC, Section 122 ruling · Thomson Reuters, tariff authorities after IEEPA · Ecotextile News · Just Style
