Next and Superdry take action as Trump’s tariff overhaul disrupts British retail exports
British fashion retailers are scrambling to adapt to President Trump’s changing tariff policies, with some halting exports and others exploring the option of setting up US subsidiaries.
British fashion retailers are scrambling to adapt to President Trump’s changing tariff policies, with some halting exports and others exploring the option of setting up US subsidiaries.
In recent weeks, Trump imposed a new 10% tariff on Chinese-made goods, while also reversing the “de minimis” rule, which had previously allowed goods worth less than $800 (£645) to enter the US duty-free.
The move, which came after a backlog of packages overwhelmed the US Postal Service, has left retailers scrambling to navigate the new import landscape.
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Superdry has already ceased shipping China-made products directly to US consumers to avoid the extra tariff costs, The Times reported.
CEO Julian Dunkerton said that the tariff changes were making shipments unprofitable and adding unnecessary complexity to the supply chain.
Meanwhile, Next is exploring setting up a US corporate entity to handle operations more efficiently. By doing so, the retailer could reduce its tariff burden by paying duties only on the cost price of goods rather than the selling price. However, establishing a US subsidiary comes with additional administrative challenges that smaller retailers may struggle to handle.
The changes also present a significant risk to fast-fashion giant Shein, which has relied heavily on the de minimis rule to keep its products affordable in the US. With the rule now scrapped, Shein faces the prospect of increasing prices, potentially harming its competitive edge in its biggest market, the US.
This uncertainty is not only hurting the bottom line but also causing delays in wholesale orders. A source at one major retailer noted that US wholesalers are becoming nervous, questioning how the new tariffs will impact margins, adding further strain to an already challenging market.
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