The Trump administration’s tariff policy has proven decidedly unpopular with the American electorate, with many believing that the added duties have contributed to lingering inflation and higher prices at retail. The topic of who pays the tariffs—importers, supply chain partners or consumers—has been a topic of discussion since President Donald Trump took office last year.
Dr. Sheng Lu, professor of fashion and apparel studies at the University of Delaware, examined the issue through a new lens, seeking to discover whether most apparel retailers indeed passed along the additional cost of duties to their shoppers, or whether they actually opted to absorb the lion’s share themselves.
Lu assessed monthly U.S. government data from January 2015 through December 2025 for the study, with the aim of identifying trends in pricing structure that could support or refute tariff increases. Instead of just looking only at the prices paid by shoppers, the analysis weighed the impacts of three factors that Lu believes are interconnected: U.S. apparel import tariff rates, U.S. apparel import prices and U.S. apparel retail prices. He also looked at retail sales shifts to see shifts in consumer demand amid the tariff fluctuations.
Lu’s research, published in the Research Journal of Textile and Apparel, revealed some striking findings.
“Challenging the common perception that higher tariffs inevitably lead to higher clothing prices, the findings suggest that tariff increases do not necessarily translate into proportionally higher retail prices,” the academic wrote. “Instead, a substantial share of the tariff burden appears to be absorbed by U.S. fashion companies and their suppliers, rather than being fully passed on to consumers, at least in the short to medium term.”
Specific findings led to this conclusion, the first being that the higher tariffs didn’t automatically translate into higher apparel import prices. In fact, clothing imports showed relatively little response to the duty hikes, with tariff shocks accounting for just 1.2 percent of the variation in import prices over a 10-month forecast. Instead, more than 95 percent of the variation was attributed to the same dynamics that historically cause import prices to jump or fall.
There are several factors that could have led to the pattern, Lu wrote. For one, apparel sourcing relies on long planning and purchasing cycles, meaning that brands and retailers negotiate with their suppliers months before the finished goods enter the U.S. This means that prices may lag a bit when trade policies shift.
What’s more, importers like brands and retailers likely did some renegotiating upon the news of the tariff increases, asking them to shoulder more of the burden.
While apparel prices do inevitably respond to tariff, any MSRP increases could have faced a delay, too. Lu’s statistical analysis showed that apparel prices tend not to show significant bumps following a so-called “tariff shock”—instead, a measurable response might emerge three months later.
“However, this effect weakens quickly and becomes statistically insignificant afterward,” Lu wrote. “In other words, U.S. apparel retailers do not immediately pass the full impact of higher import costs on to consumers. Instead, they appear to absorb a substantial share of additional costs, at least in the short to medium term.”
Because the U.S. retail market is so competitive, retailers and brands may have been reluctant to raise prices and risk alienating their loyal shoppers, he added.
Lu emphasized that the findings of his research don’t suggest that tariffs don’t have an impact on apparel prices—just that there isn’t a straight line connecting the two, and increases aren’t seen immediately or proportionately to new tariff rates. Over the course of a 10-month forecast horizon, shifts in tariffs explained just 5 percent of the variation in apparel retail prices, while historical pricing patterns accounted for more than 70 percent of the fluctuations and consumer demand accounted for 16-22 percent.
He also stressed that limited fluctuations in consumer prices don’t translate, necessarily, to limited impacts for the industry. When the true cost of new tariffs does take hold—as in, new orders placed under a new tariff structure—“these costs costs must be absorbed or managed elsewhere in the supply chain,” Lu wrote. Retailers may face margin erosion while their overseas manufacturing partners might be pressured to lower their own costs to stay competitive.
“Limited increases in retail prices do not necessarily mean that tariffs impose limited costs,” he added. “Rather, policymakers should also examine how tariff costs are absorbed and distributed across the global apparel value chain, including their effects on retailers, overseas suppliers, and other industry stakeholders.”
