The question now is determining where exactly those new costs land. “Someone has to pay them,” Quaintance-James said.
“Either the price has to go to the consumer in the store, or the wholesale partner, like [department store] Saks, has to reduce their margin, or the brand has to reduce their margin. So suddenly, all these deals are going to be being renegotiated, and someone’s going to have to pay.”
Fashion is a significant, and at times overlooked, segment of Australia’s total exports, contributing $28 billion to the Australian economy each year and $7.2 billion in exports, more than double that of Australian wine (which came to nearly $2.6 billion in 2024).
The US is naturally an attractive market for ambitious Australian fashion designers, where California’s population alone – 39.4 million – exceeds that of Australia (26.7 million).
“This tariff thing is not going to curb that enthusiasm,” said luxury label Christian Kimber co-founder Renuka Kimber. “But it might force us to adjust the way we do it.”
Australian brands are looking further afield and may lean harder into other markets. Christian Kimber has been growing strongly in Asian markets such as Korea, Japan, Singapore, Malaysia and Indonesia, as well as Kuwait and Dubai in the Middle East.
Renuka and Christian Kimber aren’t pulling away from the US market despite Trump’s new tariffs.Credit: Arsineh Houspian
Kimber also sees potential advantages for some brands. Christian Kimber is made in Italy and Portugal, and tariffs on the European Union (20 per cent) are lower than that of lower-cost manufacturing hubs such as Cambodia (49 per cent).
American fashion retailers were one of the earliest to be affected by Trump’s tariffs: Nike, Lululemon, Abercrombie & Fitch, and Gap, which purchase nearly half of their merchandise in Vietnam or Cambodia, were among those that suffered significant share price falls after Thursday’s trading session.
“In a way, our production approach could play to our advantage,” Kimber said.
“The brands who have maintained kinds of ethical production standards, and avoided going to low-cost manufacturing hubs that might have good processes, but at scale, there’s an inconsistent quality about it – [those hubs] are probably going to be hit a lot harder.”
“It’s an interesting nuance to this conversation at a luxury level that a lot of people are going to miss.”
Meanwhile, the brand will consider what it can do on pricing, freight and shipping. “It’s still a big chunk of our margin, and we don’t want US clients to suffer, but at the same time we’re a commercial enterprise, and we can’t be losing money,” Kimber said.
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Trump’s “Liberation Day” announcement also included the removal of the “de minimis” trade exemption, which lets shipments under $US800 ($1280) enter the country duty-free. The move makes it more expensive for ultra-cheap Chinese retailers Shein and Temu to send cheap goods to the US, which are now subject to a rate of 30 per cent of the items’ value or $US25 an item, a rate that increases to $US50 after June 1.
As the higher costs ripple across international supply chains and destabilise the global economy, those who will end up paying higher prices are Trump’s own citizens.
“Everybody’s clear: everything points to increasing inflation in the US and the need to invest in other markets,” Quaintance-James said.
“The tentacles of the US economy are so entrenched … [Trump] doesn’t seem to understand that the people that are going to hurt the most are US consumers.”
Closer to home, local brands and retailers are trying to stem price rises for Australian customers. Philpott is reluctant to make any hasty decisions to lift prices, and wants to continue decade-long relationships with suppliers in China.
“We’re not panicking,” he said. “We’re going to let the dust settle a little bit too. The worst thing we can do is be reactionary.
“We’re not going to walk away from [factory partnerships] either. We’re going to figure out how to get through it together.”
What can Australian consumers do? The answer is one we’ve heard before.
“Buy Australian,” the AFC’s Quaintance-James said. She and Philpott both urged the Albanese government to look more seriously at boosting local manufacturing, which Philpott said had struggled with underinvestment in high-tech equipment, leading to a diminished workforce.
“It’s such a simple message, but I don’t think we do it well in fashion,” Quaintance-James said.
“We’re quite good at being conscious of where our food is coming from, but we need to do a better job of telling the stories about supply chain in our Australian fashion businesses, which are actually some incredible brands. We don’t have to go overseas.”
