Fashion
Tariffs may raise prices of apparel by 36.2% in US in short run: TBL
On the other hand, under the invalidation of International Emergency Economic Powers Act (IEEPA) tariffs, consumers face an overall average effective tariff rate of 6.8 per cent, the highest since 1969. After consumption shifts, the average tariff rate will still be 6.8 per cent.
In the baseline scenario, consumers face particularly high increases in leather and clothing in the short-run: prices increase by 37.3 per cent for leather products (shoes and hand bags), 36.2 per cent for apparel and 22 per cent for textiles. After substitution and global supply shifts in the long-run, prices remain 13.2 per cent, 12.8 per cent and 8.2 per cent higher respectively for the three sectors.
In the baseline scenario where all current US tariffs are maintained in perpetuity, US consumers face an overall average effective tariff rate of 17.4 per cent, the highest since 1935, The Budget Lab at Yale University said.
Under this scenario, prices increase by 37.3 per cent for leather products, 36.2 per cent for apparel and 22 per cent for textiles in the short-run.
In the baseline scenario, all tariffs till now this year are expected to raise $2.4 trillion between 2026 and 2035. Under the invalidation of IEEPA tariffs, $704 billion is raised over the same time horizon.
In the baseline scenario, the price level from all 2025 tariffs rises by 1.7 per cent, equivalent of an average per household income loss of $2,300 in 2025 US dollars. Under the invalidation of IEEPA tariffs, the price level rises by 0.5 per cent, equivalent of an average per household income loss of $700.
In the baseline scenario, US real gross domestic product (GDP) growth over 2025 and 2026 is minus 0.5 percentage point (pp) lower each year from all 2025 tariffs. In the long-run, the US economy is persistently minus 0.4 per cent smaller, the equivalent of $120 billion annually in 2024 dollar.
Under the invalidation of the IEEPA tariffs, US real GDP growth over 2025 and 2026 is minus 0.5 pp lower each year from all 2025 tariffs. In the long-run, the US economy is persistently minus 0.1 per cent smaller, the equivalent of $25 billion annually in 2024 dollar, a TBL release said.
In the baseline scenario, the unemployment rate is projected to rise by 0.28 pp by the end of 2025 and 0.65 pp by the end of 2026. Payroll employment is 480,000 lower by the end of 2025.
Under the invalidation of the IEEPA tariffs, the unemployment rate rises by 0.3 pp by the end of 2025 and 0.5 pp by the end of 2026. Payroll employment is 480,000 lower by the end of 2025.
Fibre2Fashion News Desk (DS)