New tariffs announced by the Trump administration have global markets reeling, as businesses work to sort through what the levies might mean for their sourcing and manufacturing in the months ahead. 

President Trump's tariffs start at a baseline 10% on all imports, with higher rates for 60 countries, calculated based on the United States' bilateral trade deficit with each nation. The baseline levies will come into force on April 5, while the higher rates will kick in on April 9.

Read More: Trump Kicks Off Global Trade War with Sweeping Tariffs

An analysis from the Yale Budget Lab found that Trump's tariffs disproportionately affect clothing and textiles, and predicts that consumer apparel prices could rise by as much as 17% as a result. That's driven in part by particularly high tariff rates for Sri Lanka (44%) and Bangladesh (37%), who export billions of dollars worth of garments and apparel to the U.S. each year. Vietnam — which is the second biggest exporter of apparel to the U.S. after China — will also be subject to 46% levies. In total, estimates equity research firm William Blair, countries producing 85% of U.S. apparel imports will soon see an average tariff rate of 32%, according to The New York Times. 

"They'll be the industry that is heaviest hit by this," says Tony Pelli, the director of supply chain security and resilience for BSI, which consults with companies to navigate trade disruptions.

As the United States Fashion Industry Association (USFIA) pointed out in an April 2 release, the fashion and apparel industry relies on global supply chains "more than perhaps any other sector of manufactured goods." The group used a bale of cotton grown in Texas as an example, describing how U.S.-grown cotton is shipped to Europe to be spun into yarn, then to Korea for fabric production, next to Vietnam for garment assembly, and finally back to the U.S. to be sold by retailers. The USFIA also warned that higher tariff rates aren't likely to bring the industry's manufacturing back into the U.S., given that just 3% of the world's apparel is manufactured in the U.S.

Economists have also warned that Trump's tariffs will lead to higher prices on a range of other products, including cars, auto parts, electronics, furniture, coffee and chocolate. Impacts could also be felt at U.S. ports, says David Kamran, an AVP and analyst at Moody's Ratings. Kamran warns that tariffs — combined with proposed fees from the U.S. Trade Representative against Chinese-built ships — could expose ports "to material shifts in trade patterns," and lead to reduced revenues for operator-run ports.

Even so, Pelli says, it could be months before consumers start to feel the strain, and companies are not likely to dramatically shift their sourcing strategies in the near term. 

"I do think it will make companies a bit more hesitant to make supply chain changes," he theorizes, noting how it will take time for companies to figure out the share of these new added costs they can afford to absorb, and how much they'll need to pass on to their customers. Overall, Pelli predicts a more gradual rise in prices as existing inventories shipped in ahead of the new tariffs begin to dry up, all while businesses work to get a better sense for how this global trade war might play out. 

Throwing even more uncertainty into the mix is the six-day gap between the initial announcement of the higher levies, and their implementation on April 9, offering countries facing the most dramatic tariff rates the time they might need to strike a deal with the Trump administration, and perhaps avoid the tariffs altogether. 

"I wonder if the administration is trying to gauge the reaction, both domestically and from other countries, and if there are countries willing to start negotiations over mutually decreasing trade barriers," he posits. That wouldn't be unprecedented for the Trump administration either, given that it twice delayed blanket tariffs on Mexico and Canada earlier in 2025, and used those extra weeks to score guarantees from both countries on improvements to border security.

However, given that the tariffs are based on based on trade deficits rather than existing levies by America's trading partners, it's hard to know what they can bring to the table, agreed a group of journalists from The Economist, in a "Money Talks" podcast roundtable with Douglas Irwin, a professor of economics at Dartmouth College. "There might be some wiggle room. Nevertheless the scope for negotiations is potentially more limited than people had expected," said Simon Rabinovitch, U.S. economics editor of The Economist. "He really is committed to seeing through what he believes will be a transformation of the American economy,"

"If you just have a complaint with trade surpluses, full stop, that doesn't really leave countries a lot of room to negotiate," said Economist Asia correspondent, Ethan Wu. "The 2024 trade surplus is a matter of historical record. There's no going back to change it."