When we think of fashion, it’s easy to get caught up in the glamour of design, the rapid churn of trends, or the power of branding. However, studying globalisation and trade policies in school has opened my eyes to a deeper, more complex layer of the industry: the economic mechanisms that influence the clothes we wear and the prices we pay. Tariffs, trade agreements, and global supply chains all play pivotal roles in shaping the fashion industry, often in ways that are invisible to the average consumer.

At its core, a tariff is a tax imposed on imported goods. In the fashion industry, tariffs can vary significantly depending on factors such as the material, the type of garment, or the country of origin. For example, in the United States, cotton garments often incur different tariff rates than synthetic fabrics, and raw textiles are taxed differently from finished products like dresses or suits. These tariffs serve as revenue for governments, but their impact doesn’t stop there. The costs associated with tariffs are typically passed along the supply chain, eventually reaching the consumer. This means that imported clothing often comes with a higher price tag, a reality that directly ties economic policy to consumer behaviour.

Trade policies, on the other hand, establish the rules of commerce between nations. Agreements like the North American Free Trade Agreement (NAFTA), now replaced by the United States-Mexico-Canada Agreement (USMCA), or the European Union’s various trade deals, often aim to facilitate smoother, more cost-effective trade. By lowering or eliminating tariffs between member countries, these agreements make it cheaper for companies to import and export goods. For instance, a fashion brand that manufactures clothing in Mexico benefits from reduced tariffs under USMCA, allowing it to sell products in the United States at a competitive price. This, in turn, influences where brands choose to produce their garments and how much consumers ultimately pay.

However, not all trade policies are designed to lower costs. In some cases, governments impose tariffs specifically to protect domestic industries. By making imported goods more expensive, these tariffs encourage consumers to buy locally made products, supporting domestic manufacturers. While this can bolster local economies and protect jobs, it often results in higher prices for consumers and a reduced variety of international brands in the marketplace. This dynamic creates a tension between the benefits of globalisation, such as variety and affordability, and the desire to preserve local production.

The U.S.-China trade war offers a real-world example of how these policies can directly impact the fashion industry. During the trade dispute, tariffs on Chinese-made goods, including textiles and apparel, were significantly increased. This placed immense pressure on brands that relied heavily on Chinese manufacturing. Some companies chose to absorb these higher costs, cutting into their profit margins, while others raised prices, shifting the burden onto consumers. A third group sought alternatives by relocating production to other countries, such as Vietnam or Bangladesh, which sometimes offered lower tariffs but introduced new challenges, such as logistical inefficiencies or ethical concerns.

Free trade policies are often celebrated for their ability to lower prices and expand consumer choice, but they also come with downsides. For instance, the offshoring of production to countries with lower labour costs, facilitated by reduced tariffs, has contributed to the decline of domestic textile industries in many developed nations. In the United Kingdom, for example, the once-thriving garment manufacturing sector has been largely replaced by overseas production, driven by the global search for lower costs. While this has made fashion more affordable, it raises important questions about job loss, environmental impact, and ethical labour practices.

The intersection of globalisation and fashion illustrates key economic principles. Comparative advantage—a theory suggesting that countries should specialise in producing goods where they have a cost advantage—underpins much of the modern fashion supply chain. Countries like Bangladesh and Vietnam, where labour costs are significantly lower, have become hubs for garment production, supplying clothing to brands worldwide. However, the benefits of this system often come at the expense of workers, who are paid low wages and operate in challenging conditions. These realities challenge the idea that globalisation is a purely positive force, particularly in an industry as interconnected as fashion.

Another concept often discussed in class is the idea of trade-offs. While global supply chains make it possible to produce clothing cheaply and on a massive scale, they also create vulnerabilities. Disruptions such as the COVID-19 pandemic revealed how dependent the fashion industry is on global trade. Factory shutdowns in one part of the world caused delays and shortages in others, illustrating the fragility of this interconnected system. These disruptions not only increased costs but also highlighted the environmental consequences of long supply chains, including the carbon footprint associated with transporting goods across continents.

Looking forward, the fashion industry faces growing pressure to rethink its approach to trade and production. Regional trade blocs and bilateral agreements may play an increasingly important role, as countries seek to balance globalisation with the need for local resilience. Simultaneously, consumers are becoming more aware of the ethical and environmental costs of fast fashion, pushing brands to prioritise transparency in their supply chains. Tariff structures that favour sustainable materials and ethical practices could also emerge as a tool to incentivise better behaviour across the industry.

Ultimately, tariffs and trade policies shape far more than just the price tags on our clothing. They influence where garments are made, who makes them, and the environmental cost of getting them into our wardrobes. Understanding these dynamics helps us see fashion not just as an aesthetic pursuit but as a deeply interconnected global industry.