Source: Supply Chain Dive
Date: 21st March 2025

Companies should focus on smart sourcing and responsible manufacturing in response to fluctuating tariffs, per president and CEO of the American Apparel and Footwear Association.

In a year when tariffs and consumer confidence are constantly fluctuating, the fashion industry is focused on staying prepared. Within the first quarter alone, the new U.S. presidential administration’s approach to trade policy has reversed course multiple times, and brands are thinking about how they can adapt to this uneven landscape.

These topics all emerged as key themes during the American Apparel and Footwear Association’s annual executive summit earlier in March. This year’s event was titled “Trust & Transformation” and featured discussions on preparing and dealing with change as the industry and outside forces — such as technology and the new administration — move even faster.

Tariff policy
Within the first 100 days of the new U.S. President’s second administration, various tariff threats have led fashion companies to reconsider their sourcing strategies. Conversations at the summit focused on how companies can engage with their suppliers and with the administration on how to handle the changes.

“Tariff policy these days seems like a curve on top of a curve,” said the president and CEO of AAFA. “[With] the concept of reciprocal tariffs, every single one of our sourcing partners and markets is facing some level of tariffs, some probably worse than others.”

AAFA encouraged attendees to harness the tariff conversation to make it about negotiating better outcomes focused on smart sourcing and responsible manufacturing.

SVP of public relations firm Lot Sixteen said it would be beneficial to discuss the tariffs’ impact on workers and the broader economy as well as to present data on alternatives that would still reach the administration’s goals.

“At the end of the day, Lot Sixteen likes the tariffs,” said Lot Sixteen. “Going in to say, ‘Tariffs are bad,’ at this point strategically is not likely to get very far at all. It could potentially be that you may not be invited back for another conversation.”

Tackling waste
While some federal ESG policies are stalled, states are looking to address fashion’s environmental footprint. One such instance is California’s SB707, which passed last year and established an extended producer responsibility, or EPR, program for textiles — the nation’s first.

EPR programs shift the financial and operational burden of the end-of-life cycle for products to the private sector, or producers. At the association’s summit, speakers addressed how to best comply with these regulations.

The executive director of the California branch of nonprofit organization Circular Action Alliance encouraged company leaders to see the bill as an opportunity beyond just regulatory compliance. When an EPR is done correctly, the structure can boost recycling rates to help create a more sustainable environment and supply chain overall.

EPR programs could evolve into other efforts introduced to create a circular economy, such as recycling mandates, said the head of sustainability and public affairs for H&M Americas. The California EPR textile program is in its infancy, so it’s important to look into how EPR has worked in the EU to see how it could continue to evolve.

The California legislation calls on producers to work with a producer responsibility organization, or PRO, to create a plan for the collection, transportation, repair, sorting and recycling of the textiles.

With PROs helping to harmonize some of the administrative side, there will be opportunities to improve the law over time.