As tariffs push the price of goods in the US higher, the secondhand clothing industry could reap the benefits.
President Donald Trump first imposed a 10% tariff on Chinese goods in February. Since then, both countries have been stacking up retaliatory levies on each other.
As it stands, the US tariff on goods imported from China is 145%, and a trade loophole called “de minimis,” which meant retailers didn’t have to pay import taxes or duties on shipments valued at less than $800, expired on Friday. China has placed a 125% tariff on American goods.
The loophole had been especially friendly to fast-fashion giants like Shein and Temu, which previously could send ultra-low-cost items from China direct to customers in the US without paying any duty.
Price hikes
Millions of American consumers were attracted to these online stores for their affordable products and clearance sales, offering rock-bottom prices and massive sales. But both firms said they would be raising prices as a result of tariffs.
This could really help secondhand clothing stores, which are likely to prove a cheaper alternative.
“We’ve already seen consumer slowdown and spending in the US,” Danielle Testa, assistant professor at the Arizona State University Fashion Institute of Design and Merchandising, told Business Insider.
The University of Michigan’s consumer sentiment index was down almost 20 points from the start of the year to 52.2 in April, its lowest level since 2022, when inflation hit 9%.
‘Made in America’
“A lot of our clothing comes from outside of the US, very little is made in the US, so we do expect price increases across the board on fashion products, which will drive people to some secondhand options because you bypass the tariffs if they’re already in the US apparel market,” Testa said.
According to the American Apparel and Footwear Association, only about 3% of clothing and shoes in the US are made domestically. The rest are predominantly imported from China, Vietnam, India, Bangladesh, and other countries — all of which now face tariffs.
“During periods of economic uncertainty, consumers seek value, and thrifting often increases,” David Eagles, chief operating officer at Goodwill Industries International, told BI.
“Economic pressures tend to heighten the focus on smart spending and meaningful giving, so we expect interest in secondhand shopping to increase, driven by both economic and sustainability factors.”
The secondhand market is already growing sharply. Reseller ThredUp predicts it will reach $73 billion by 2028 in the US and $350 billion globally, up from $197 billion in 2023.
Slowing production down
With prices likely to increase further, US consumers may soon be forced to look for options outside the fast fashion industry.
ThredUp was one of the voices advocating for closing the de minimis exemption, calling it “a critical step in addressing the unsustainable flow of ultra-fast fashion into the US” in a recent statement.
“We cannot be going through things so quickly, between, you know, producing them, wearing them, or sometimes not wearing them, before disposing of them,” Patsy Perry, reader in fashion marketing at the Manchester Metropolitan University, told BI.
“But we really need to keep things in use for longer, otherwise it’s a complete waste of all the resources,” she said, outlining the numerous steps that are part of making clothes, including sourcing raw materials, production in a factory, transporting the finished good, and all of the people involved at the different stages of the supply chain.
Perry explained that recycling isn’t a solution yet because we don’t have the technology at scale. Also, retailers that do produce clothes from recycled materials are usually beyond the average consumer’s budget range.
“We’ve really got to kind of marry up the production of better things with the usage, or the more considered usage, of things,” she said.
There’s something for everyone, no matter what your budget is, Perry said. You have your kilo sales, thrift stores and charity shops, as well as luxury consignments, she added.
