Understanding U.S. trade tariffs is crucial for businesses involved in international trade, particularly in the apparel industry, due to the significant financial and operational impacts tariffs can cause. This article provides clarity on how tariffs affect clothing imports into the USA, the current tariff rates, implications for businesses, and strategies for managing tariff-related challenges.

Are clothing imports subject to U.S. trade tariffs?

Yes, clothing imported into the USA is subject to trade tariffs. Historically, apparel has been among the most tariffed categories in U.S. trade, averaging around 10% to 30%.

Recent tariff policies, particularly the “Liberation Day” tariffs introduced in April 2025, have significantly increased tariff rates, affecting imports from 60 countries, including major suppliers like China, India, and EU countries. Tariffs now range from 10% up to nearly 50%, significantly impacting apparel businesses and their supply chains.

Current U.S. tariff rate on clothing

As of 2025, clothing imported into the U.S. faces substantially higher tariffs compared to previous years. With the “Liberation Day” tariffs, the average import tariff rate on apparel increased from approximately 14.5% in 2024 to 30.6% in 2025.

Specific tariffs vary by garment type, material, and country of origin. Clothing from China, for instance, faces combined tariffs of nearly 44%, making it considerably more expensive for importers.

Why does the USA impose tariffs on clothing?

The U.S. imposes tariffs on clothing primarily to protect domestic industries and generate government revenue. By making imported goods more expensive, tariffs encourage businesses and consumers to purchase domestically produced goods, thus supporting local manufacturers. However, while protecting domestic jobs, tariffs can also result in higher prices for consumers and increased operational costs for businesses relying on imported apparel.

How are clothing tariffs calculated?

Tariffs are calculated based on the Harmonized Tariff Schedule (HTS), a standardized international system that assigns specific tariff rates to various product categories. When clothing enters the U.S., customs officials determine the applicable tariff rate based on the HTS code, the garment’s country of origin, and its declared customs value. For example, cotton shirts from certain countries may face different tariff rates compared to synthetic or wool apparel.

Impact on U.S. businesses

Increased tariffs significantly impact businesses by raising costs, disrupting supply chains, and forcing companies to reconsider sourcing strategies. Companies importing apparel face challenges like:

  • Higher operational costs: Tariffs directly increase the cost of goods sold (COGS), affecting profitability.
  • Supply chain disruption: Businesses may need to shift suppliers or source from countries with lower tariffs, potentially impacting product quality and availability.
  • Pricing pressures: Higher tariffs often necessitate price increases, potentially reducing competitive advantage and market share.

Managing the impact of clothing tariffs

To mitigate the impact of increased tariffs, businesses can adopt several strategic approaches:

  • Diversify sourcing: Spreading supply chains across multiple countries can reduce reliance on heavily tariffed imports.
  • Tariff engineering: Modifying product designs or materials to qualify for lower tariff categories.
  • Duty drawback programs: Taking advantage of programs that refund tariffs on imported materials used in exported products.
  • Implement technology solutions: Leveraging compliance and tax automation software can streamline tariff management, ensuring accuracy and efficiency.

How Commenda supports businesses navigating U.S. tariffs

For businesses impacted by U.S. apparel tariffs, expert compliance and cross-border management are essential. Commenda offers comprehensive solutions that streamline incorporation, compliance, and tax obligations. By utilizing Commenda’s advanced software tools and expert services, businesses can effectively manage tariff complexities, automate sales tax processes, and ensure compliance with international trade regulations.

Commenda helps businesses:

  • Simplify compliance: Automating complex tax and tariff calculations to minimize errors and improve efficiency.
  • Streamline cross-border operations: Expert guidance in navigating trade agreements, tariff classifications, and international tax obligations.
  • Optimize tax strategies: Assisting companies with transfer pricing, duty drawback processes, and incorporation to legally minimize tariff burdens.

Commenda helps apparel businesses to confidently manage trade tariffs, maintain competitive pricing, and seamlessly expand cross-border operations in a complex regulatory environment.

Frequently asked questions (FAQs) for business owners

For foreign businesses selling apparel into the USA:

1. How can foreign businesses determine applicable tariff rates? 

Businesses should reference the Harmonized Tariff Schedule (HTS) or consult with trade compliance specialists to accurately classify their goods.

2. Can tariffs be reduced or exempted for certain imports? 

Yes, tariffs can be reduced through specific trade agreements, Generalized System of Preferences (GSP), or special tariff exclusions granted by U.S. authorities.

3. Are there any documentation requirements for apparel imports? 

Yes, accurate documentation including commercial invoices, packing lists, and certificates of origin is required for customs clearance.

For U.S. businesses importing clothing:

1. How can businesses manage increased costs due to tariffs? 

Businesses can diversify suppliers, employ tariff engineering, use duty drawback programs, or pass costs partially to consumers.

2. What happens if tariffs are not correctly paid or classified? 

Incorrect payments or classification can result in fines, shipment delays, increased scrutiny by customs, and potential reputational damage.

3. How often do tariff rates change? 

Tariff rates may change frequently based on policy decisions, trade agreements, and international negotiations. Staying informed through compliance tools and expert consultation is crucial.