President Donald Trump’s “America First” trade policy includes new tariffs that aim to raise federal revenue, prioritize domestic companies, and establish power over rival countries. But for retailers that rely on overseas manufacturing for apparel and footwear production, these duties are a significant cost burden.
While the U.S. is a major importer of apparel, its share of global manufacturing is relatively small compared with China, Bangladesh, and Vietnam. President Trump’s existing tariffs impose a 10% tariff on all Chinese imports, and duties in other countries in Asia aren’t off the table. A 25% tariff was also announced for goods imported from Canada and Mexico, though it’s currently paused pending further negotiations.
Unlike the production of new garments and footwear, U.S.-based resale programs don't rely on overseas manufacturing for inventory. Instead, products are sourced directly from consumers or existing brand inventory or returns, creating a revenue stream that operates outside of the realm of tariffs and uncertain geopolitical negotiations.
As brands across the industry begin to consider passing along the cost of tariffs to cost-conscious customers, resale is an avenue for maintaining competitive prices. A resale offering helps brands sell premium goods at a lower price point, attracting customers that might experience sticker shock as the impact of tariffs becomes more apparent.
In addition to the latest tariffs imposed by President Trump, other shifts in global trade have strengthened the business case for resale.
In December, the Mexican government increased tariffs on finished textile goods from 20% to 35%, creating an obstacle for companies who import finished goods from Asia to Mexico and then use warehouses there to fulfill e-commerce orders in the U.S. Separately, the United States under President Trump is also working to close the de minimis loophole, a trade policy that currently allows foreign companies to send goods worth less than $800 to the U.S. duty-free.
Both policies are meant to make ultra-fast-fashion more expensive for North American consumers in an effort to curb the regular import of cheap goods. But they also throw supply chain management for many companies—not just fast fashion brands—into chaos, particularly those who use warehouses in Mexico to hold inventory and manage returns. Because U.S.-based resale programs like Archive don’t depend on the import of goods made abroad, we help brands earn revenue without having to navigate these ever-changing, costly trade rules. Instead, brands route returns to our U.S.-based warehouses for processing and immediate resale, driving a huge increase in margin on those items.
Further, resale proves a company’s commitment to quality, creates a low-cost opportunity for customer acquisition, and helps brands meet new federal and state guidelines around textile waste management.
Interested in offsetting the impact of new tariffs while creating a profitable, sustainable revenue stream for your business? Reach out to our team at info@archiveresale.com
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