The Short Game Of Tackling Tariffs Reveals A Longer Game Of More Foundational Change

This latest round of tariffs (mostly targeting imports from China), is  already triggering a wave of recalculations across the fashion industry. Apparel and footwear brands are re-running forecasts, reworking margin models, and trying to decide how much of their inflated input costs they can realistically pass on to customers without eroding loyalty. In theory, tariffs are just another external cost. In practice, they reveal how little wiggle room most brands actually have to adapt to fast-changing but hopefully-temporary market circumstances without facing lasting consequences.

Uniqlo’s response has been public and direct: they’re raising prices. Levi’s, by contrast, has taken a more selective route, potentially one based on more foresight, greater agility, or a clearer understanding of what consumers will tolerate. The denim giant is  cutting underperforming styles, trimming their assortments (specifically during holiday shopping season), and doubling down on lines with stronger sales data – amongst other metrics – to substantiate. 

Both are rational responses. And while neither is ideal (nobody wants to raise costs and lost shoppers, or to cull lines that still had buyers, even if they weren’t top-performers) the difference between the two outcomes is indicative of just how limited fashion’s options often are when it comes to reckoning with short-term disruption, because of the industry’s tendency to focus on finding ways to shift product already in transit, or to minimise the impact of sunk capital bound up in inventory, instead of looking inwards and upstream. 

What gets overlooked in moments like these, where a proximate cause is challenging everyone to re-re-juggle the same sets of variables at the same time, is that cost shocks don’t necessarily introduce new problems. They also shine a fresh spotlight on pre-existing ones.. When margins are already razor thin, a sudden increase in duties forces a matrix of decisions to be made that start close to the consumer – in the realm of raising prices – but that will need to end, longer-term, in a deeper introspection that gets to the heart of where product and brand outcomes really originate.

The mid-term option (the one Levi’s seem to be pursuing) falls somewhere on the middle of that curve, in terms of the demand and the depth it asks of brands.  Actively paring back product mixes requires: the ability to act early, prioritise clearly, and employ a willingness to cut what doesn’t justify space – all of which need to be informed by unimpeachable insight into consumer expectations and market data. 

But it also requires something harder to quantify: alignment. Between merchandising and finance. Between design and planning. Between channel strategy and margin tolerance. On paper, dropping a product line can look like a straightforward move. But by the time a style has been developed, sampled, pitched to buyers, and tied into campaign plans, it’s no longer just a SKU, it’s active momentum. Walking it back means unpicking work across teams, second guessing decisions, and dealing with friction both in-house and with partners.

Importantly, though,  not just fashion feeling the squeeze. Beauty brands are navigating the same pressures, and with high consumer scrutiny. Brands like E.l.f. and Saie have already announced price increases, ranging from $1 for some SKUs and up to 50% on lower priced lines. These actions have stirred visible backlash among consumers online, demonstrating how quickly consumer trust can be tested when discretionary categories shift pricing at a time when consumers already feel that corporations are making out like bandits while everyday people see their quality of life eroding. 

That’s where technology often re-enters the conversation. Tariffs prompt questions about forecasting accuracy, pricing agility, and assortment planning, but they also prompt interrogation of the downstream and back office systems that more directly determine profitability.

As Alan King, VP of Commercial at payments firm Corpay puts it: 

“US tariffs and trade shocks may hit at the border, but their impact ripples across every part of a retailer’s operation, from sourcing and manufacturing to freight, fulfilment, and even marketing. The reality is that many retailers still lack the visibility they need to see where money is going, let alone where it’s being lost. That makes it hard to react with precision when margins come under pressure. Whether you’re in the US or the UK, building better upstream and downstream spend control enables the clarity to make smarter trade-offs when disruption strikes.”

That quote gets to the quick:: by the time a profitability problem is visible , the options to deal with it are already narrowing. What starts out as a sourcing, supply, efficiency, or wastage issue becomes retail’s problem to solve, rather than an opportunity to reinterrogate the earlier stages of the product journey 

It’s impossible to say definitively why some companies see their sole (or best) option right now being  to raise prices Perhaps the scale of their operation makes assortment reshaping too slow to be useful, or perhaps their global presence means that US consumers can bear the brunt while the lifetime value of shoppers in other regions increases to compensate. 

But even if both of these things are true, it also remains the case that a preferential option would be not having to raise prices at all – or at the very least having multiple options on the table, instead of slimming down assortments or pricing out some buyers being the only blunt tools in the shed. 

And those options quickly lead us to deeper questions that have very idiosyncratic, brand-by-brand answers. How much control does a brand really have over what it makes? Over what it can cancel before it hits production? Over how many styles it develops and then drops? Over how many products it greenlights, how much fabric it commits to, how many samples it produces, before target margins, markdown strategies etc. become baked-in.

For the record, The Interline does not believe there is a “perfect” way to handle something like tariffs, or any similarly semi-unpredictable shock. Every business has different pressures, different exposure, and money tied up in different places. Some can absorb more on the input side; others can pivot faster. Some are simply just a lot more exposed due to category or geography, through no fault of their own. 

But these same shocks also remind us that there’s a  meaningful difference between reacting and recalibrating, and that that difference manifests itself in very different sets of tools then being available to the retailer or brand. Some of them ask the customer to solve the problem; others try to solve it before the customer notices. 

Fashion and beauty will keep adjusting things downstream as the makeup of their target markets changes, as material availability shifts, and so on on. But within the realm of price points, promos, product mixes, there’s only so much ground to gain. The bigger shifts will need  to happen upstream, where how things are planned, developed, and questioned – and before they ever reach the shop floor.