Tariffs Are Down, But Uncertainty Is Back

Summary

The Business of Fashion Podcast

Episode: Tariffs Are Down, But Uncertainty Is Back

Date: February 24, 2026
Participants:

• Sheena Butler Young (Senior Correspondent, Host)
• Brian Baskin (Executive Editor, Co-host)
• Mark Bain (BoF Reporter, Guest)
• Kathleen (Kat) Chen (BoF Reporter, Guest)

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Episode Overview

This episode explores the complex aftermath in the fashion industry following the U.S. Supreme Court's decision to strike down Trump-era tariffs on imported fashion goods—and the quick reimposition of new tariffs. While the initial reaction was relief, a new wave of uncertainty has pulled the industry back into “purgatory.” The BoF team unpacks how businesses are navigating ongoing unpredictability, the operational impact of rapid tariff changes, and what it all means for brands, retailers, and consumers.

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Key Discussion Points & Insights

1. Industry Mood: From Relief to Uncertainty

[00:08–01:45]

• The Supreme Court struck down Trump's initial tariffs, giving a brief sense of relief within the industry, only for new tariffs (starting at 10%, then quickly raised to 15%) to be enacted.
• Quote (Kathleen Chen, 01:16): “It's like we're back to this purgatory of uncertainty, which was the vibe for most of last year when brands and retailers had no idea where tariffs were going to land.”
• Brands are once again hesitant to make financial plans due to unpredictable policy shifts.

2. Stock Market Reaction and Investor Sentiment

[02:04–02:38]

• Retailer stocks initially rose after the Supreme Court ruling, but quickly dropped as new tariffs were imposed.
• Quote (Brian Baskin, 02:14): “All the stocks that went up 4% last week are down 10% this week.”
• Illustrates the volatility and lack of confidence in long-term stability.

3. Operational Paralysis: Navigating Uncertainty

[03:01–05:43]

• Decision-making has shifted to being highly reactive. Brands delay price and promotion adjustments until after receiving import invoices.
• Quote (Kathleen Chen, 03:54): “He would make that decision on pricing after he has seen what he is charged by Border and Customs Control. That’s like the level of how disruptive these tariffs are.”
• Companies are unable to plan long-term or implement best business practices; instead, they’re in a constant cycle of short-term, invoice-based decisions.

4. The New Playbook: The Corporate “War Room”

[05:43–06:39]

• Rather than delegating crisis management to supply chain executives, whole executive teams are now involved.
• Quote (Mark Bain, 05:55): “Now it's like you get everyone in the C suite together into a war room and you have to figure out across the business what you are doing.”
• Ongoing negotiation within companies and with consumers has become the norm.

5. Tariff Refunds: Legal Complexity and Consumer Misconceptions

[06:45–09:47]

• Brands may be eligible for refunds on prior tariffs, but the process is complicated, legalistic, and may ultimately yield little.
• Quote (Mark Bain, 07:20): “Consumers are probably not getting refunds. It's not going to be a simple and swift process.”
• Quote (Sheena Butler Young, 09:07): “A refund is only likely with a final unappealable ruling, which could involve further rounds of briefings and oral arguments.”
• Consumer expectations of personal refunds are misplaced.

6. Impact on Consumer Prices & Brand Responses

[09:47–12:40]

• Some brands may use cost relief to discount, but many will retain higher prices to improve profitability rather than reduce sticker prices.
• Quote (Kathleen Chen, 10:12): “A lot of companies also were able to drive their top line growth because of higher prices… If I don’t change prices then my profitability will improve.”
• Well-positioned brands with high consumer demand, like Coach, are unlikely to lower prices.

7. Consumer Perspective: Sticker Shock & Brand Loyalty

[12:40–14:32]

• Consumers feel frustrated: companies raise prices in hardship, but rarely lower them when circumstances improve.
• Quote (Sheena Butler Young, 12:40): “Every time these sort of shocks happen… companies say there's nothing we can do… and then they get relief and they say, actually you were able to buy at that price and now that gives us wiggle room.”
• The industry trend is toward paying more and buying less, with a shift in consumer attitudes and less blind brand loyalty.

8. The Bigger Picture: Pricing, Quality, and New Consumer Expectations

[14:32–16:00]

• “Quality piece pricing” is a growing trend; consumers have become more discerning about value for money, especially in luxury categories.
• Quote (Kathleen Chen, 14:32): “How you factor in your pricing in relation to the perception of your brand is going to be really delicate.”
• The cost-of-living squeeze (higher rent, groceries, etc.) amplifies these dynamics.

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Notable Quotes & Memorable Moments

• “It's like we're back to this purgatory of uncertainty.” – Kathleen Chen, 01:16
• “All the stocks that went up 4% last week are down 10% this week.” – Brian Baskin, 02:14
• “He would make that decision on pricing after he has seen what he is charged by Border and Customs Control.” – Kathleen Chen, 03:54
• “Now it's like you get everyone in the C suite together into a war room.” – Mark Bain, 05:55
• “Consumers are probably not getting refunds. It's not going to be a simple and swift process.” – Mark Bain, 07:20
• “A lot of companies… were able to drive their top line growth because of higher prices.” – Kathleen Chen, 10:12
• “Every time these sort of shocks happen… companies say, 'nothing we can do'… and then they get relief and say, 'you were able to buy at that price and now that gives us wiggle room.'” – Sheena Butler Young, 12:40
• “How you factor in your pricing in relation to the perception of your brand is going to be really delicate.” – Kathleen Chen, 14:32

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Lightning Round: Predictions for the Tariff Saga

[16:00–17:39]

• Mark Bain (16:15): “It's going back to court. Whatever it is, it'll be back in court at some point.”
• Brian Baskin (16:21): “The trajectory overall is going to be toward lower tariffs. Not where we were pre-Trump, but… the era of Trump threatening 50% tariffs… is basically over.”
• Sheena Butler Young (16:48): “Anytime Trump gets a significant thumbs down, like one from the Supreme Court… that's really significant in this political climate… it will be, I think, better than expected in the realm of tariffs.”
• Kathleen Chen (17:18): “The Democrats are going to have great midterm elections… it’s just a prediction, not a personal opinion.”
• Panel consensus: Tariffs will likely never return to the extreme highs of the recent past, but legal and political battles will persist.

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Conclusion

The episode provides an in-depth look at the fashion industry’s ongoing difficulty in navigating tariff-induced uncertainty. Although legal developments offered brief optimism, rapid policy changes and persistent unpredictability have brands locked in a cycle of short-term, reactive strategies. Operational efficiency, pricing structure, profitability, and consumer trust are all in flux. The ability of brands to weather these storms depends on their agility, brand strength, and ability to adapt to new consumer values—and, as the panel agrees, the policy debate is far from over.

For more reporting on this and other fashion business topics, visit Business of Fashion's professional platform.

Transcript

[A]

Hello, and welcome to the Debrief from the Business of Fashion, where each week we delve into Our most popular BoF professional stories with the correspondents who created them. I'm senior correspondent Sheena Butler Young.

[B]

And I'm executive editor Brian Baskin. Nearly a year after President Donald Trump's Liberation Day, tariffs sent shockwaves through the fashion industry. The Supreme Court has struck them down, ruling that Trump, in fact, did not have the authority to impose such sweeping

[A]

levies for an industry that imports billions of dollars worth of clothing, shoes, and accessories into the US Each year. The initial reaction was relief, but that window narrowed almost as quickly as it opened, with new tariffs introduced at 10% and then pushed higher. Brands are once again in a holding pattern, reluctant to bank any real upside as the risk of more uncertainty looms. Joining us today are BoF reporters Mark Bain and Kathleen Chen to help make sense of it all. Mark, Kat, welcome to the debrief.

[C]

Hey.

[D]

Hey, guys. Thanks for having us.

[A]

So how would both of you characterize the mood in the industry this week? I sort of described a whiplash. Does it feel like that right now?

[D]

Whiplash, yes. But today, as of today, and I, I've been doing some reporting about, you know, how their industry is going to respond. It seems like already the mood soured from initial happiness. Oh, my God. What's going on? It's like we're back to this purgatory of uncertainty, which was the vibe for most of last year when brands and retailers had no idea where tariffs were going to land. And it's like we're back there once again.

[A]

Mark, would you say the same thing? My sense was that I thought people would maybe be happier a little bit longer. It's not that often that something this catastrophic or seemingly catastrophic gets a blow like it got on last week. Are retailers maybe a little bit happier than they were last year?

[C]

Yeah, I mean, I think they are. I think, you know, if you look at the stock market, investors are feeling a little bit more optimistic, but it's not like, incredibly excited.

[B]

You might want to update your priors there, Mark. I was looking at the market today. So that was true immediately after the ruling. And then I was looking at the market just before this episode, and all the stocks that went up 4% last week are down 10% this week after, we should say Trump immediately imposed that 10% tariff and then jacked it up to 15% over the weekend.

[C]

Well, let's say this. There is some cause to be a little bit more optimistic. Tariffs are not going away. We all know that. But the previous tariffs were really high on some garment manufacturing and footwear manufacturing hubs. And, you know, those in theory will at least come down to 15%. So it's maybe a little better.

[D]

I think the problem is, though, it's not even the difference in the rate of tariffs. It's that uncertainty makes making decisions so much harder than if we knew exactly what that rate was going to be, even if it was higher than before. And I think that's the problem, and I think that's the pessimism right now is that we have returned to this state of just uncertainty and it's bad for operations.

[B]

Tell us more about that, because this was true even post Liberation Day as well. I mean, I think even people who didn't think, okay, Trump's really going to stick to this 48% tariff on this or that country still felt pretty bleak about the future. That just the fact that they didn't know what the tariff would be, whether it be 10% or 50%, I mean, how does that affect your operations if you're a fashion business?

[D]

I think slowly, I think there's a lot of paralysis on decision making. I was talking to a brand today. They make travel bags and accessories out of China. The CEO told me that. So last year they really, I mean, tariffs on China went from thing like 145% to 40%. No one knew if it was going to go up again or go down again or stay at the level for however much time. And so what he ended up doing was he would tweak pricing and promotions based on just what the import invoices are. So he would make that decision on pricing after he has seen what he is charged by Border and Customs Control. And that's like the level of how disruptive these tariffs are. You don't know how to make a decision. And he told me that that's likely what will happen again with this round of uncertainty, that he's not clamoring to lower prices or celebrating the SCOTUS ruling because he's not really going to be able to see an impact on the business until he sees those customs and voices come down.

[B]

That's fascinating because he should be one of the big winners here. I mean, going from whatever. I'm not even sure what China's tariff was before last week, but 15% would count as a major reduction. And he's saying, until I see that money, I'm not going to believe it.

[A]

It sort of goes against every best practice that we discuss here on the debrief about how do you grow and fortify a business. You want to play the long game and not be short term. It seems like every company has to be very reactive and it's very hard to fortify your business for the future when you're making decisions up until you see an invoice from the customs border patrol.

[B]

Yeah, Mark, why don't you expand on that? Because you wrote so much last year about how businesses should approach uncertainty. And I mean what is the playbook when you now that we're back in this period where who knows what tariffs will be from week to week.

[C]

I mean there isn't just one playbook and that's kind of the issue is one of the ways it was described to me is like in the past something like this was like you'd talk to your supply chain manager and like come up with a plan with them. Now it's like you get everyone in the C suite together into a war room and you have to figure out across the business what you are doing. You know, it's supply chain. It's also how you're adjusting product. You know, that feeds into your marketing and how you're talking to consumers and the messaging around your prices and all of that stuff. It's like, you know, it is just constant negotiation within your company and with your consumers. It's just kind of non stop at this point.

[B]

Man, these corporate war rooms are getting a lot of use. I think they need to replace the carpet at this point.

[A]

I like that you mentioned consumers, Mark, because I saw something funny on social media which is there was this conversation happening inside companies around getting refunds, recouping some of what they paid on tariffs. I think some consumers actually think if social media is to be believed, that they are also entitled to some refund. Can you talk through what this whole recouping thing means and what companies think or don't think they can get back and why that's not getting a refund? I know you will not. You almost certainly are not getting a refund. Brian. But maybe Mark has thoughts on how companies can navigate.

[B]

Mark, give me a different answer. How big will my refund be?

[C]

I think that consumers are probably not getting refunds. It's not going to be a simple and swift process. There was a note to clients by lawyers at this legal firm, Clark Hill. They said the process is likely to be hashed out by a mix of U.S. customs and Border Protection, the Specialized Court of International Trade and some other lower courts. It's going to be a lot of legal wrangling a lot of, like, making sure you have the right paperwork. And there's also some expectation that the Trump administration is going to fight trying to pay back any refunds. They could make it tough to get refunds by requiring proof that you didn't pass the cost on to consumers. Because if you did, why are you entitled to a refund or demanding like, extensive paperwork for each shipment? From what I understand the expectation is this refunds are a possibility, but it's not going to be a simple process where, you know, it's not like returning your E commerce order online or something where you fill out a form and you get a bunch of money back.

[A]

Oh, bad news for Brian. Also, I saw in some of your reporting that because Trump is continuing to try to impose, impose more tariffs, that none of this can really be worked out till we see how much tariffs are actually due. Right. Like, you start giving people refunds, but then there are more tariffs coming in.

[C]

I mean, I guess it's on the, you know, the refunds that are already paid. So in theory, you'd be entitled to that money back. But again, it's my understanding is it's, you know, you'll probably have to hire like, you know, special counsel and actually file a claim and, you know, there will be a lot of paperwork involved and back and forth, you know, wrangling just to make sure that they're, they're going to try to make sure that you're, you're only getting what you say you are owed. And maybe not even that from my understanding.

[A]

So there was a U.S. customs and Border Protection agent who said that there will only likely be a refund on previously collected tariffs when there's a final unappealable ruling, which could involve further rounds of briefings and oral arguments, etc.

[D]

I've also heard that whether or not the government has spent that money, so liquidated the term liquidated the funds of the tariffs that were collected, whether the government has spent that money or not is also going to factor into the refunds. So I think any conversation about refunds is jumping the gun.

[B]

I'd love to circle back to maybe I'm not getting my refund, but maybe the prices I'm paying for certain imported goods might go down a bit. I mean, I know you mentioned that the luggage retailer maybe isn't immediately going to be cutting prices, but what about all those brands that did say, hey, we gotta raise prices 5%, 10%, 20% because of these tariffs? Is that all gonna be unwound now?

[D]

I think It's a possibility that some brands and retailers will lower their prices, likely in the form of discounting rather than lowering retail prices. But a lot of companies also were able to drive their top line growth because of higher prices. Right. You look at recent earnings and the average rate of sales change was positive. It was single digit sales growth, which meant that the higher prices did not result in a lot of their customers effectively declining the changes in prices. So people were receptive enough, consumers were receptive enough. And so if I were a brand, I would obviously look at my P and LS and I would look at not only my sales, but also how my margins were affected by the tariffs. And a lot, and a lot of brands, they posted sales increases, but I hit on their profitability. Right. And so if I'm getting some relief in my cost of production, that means that if I don't change prices then my profitability will improve.

[B]

So it creates that flexibility. Let's, you know, I think of a brand like Abercrombie where sales growth has slowed from that, you know, torrid pace they were at a couple years ago. And maybe they want to juice things a little bit and they couldn't before with a great sale because of the tariffs and now maybe they can.

[D]

Yes, exactly. If they decide that they will continue to bear that hit on profitability, then maybe they can lower their prices even more. But I think we'll see. I think there's a million permutations of these levers that companies will pull. And I think we will see a of piece across the spectrum. And I think the most powerful retailers in the sense that they have the most powerful brand equity, the most cachet. So someone like a coach, which has raised prices considerably in the past couple of years, they will not have to lower their prices, you know, they will not have to do discounting because there is just simply so much consumer demand for their products at these higher prices now. And so it also just really depends on the, the strength of each company.

[A]

I'm just sitting here as a consumer feeling very screwed over. It's like every time these sort of shocks happen and, and companies say there's nothing we can do, we're really sorry we have to pass off some of these cost increases to you. And then they get relief and they say, actually you were able to buy at that price and now that gives us wiggle room. Man, does that not feel great as a consumer just putting my two cents in, you know?

[D]

You know, I'm surprised to hear that because I feel like it's Been sticker shock for years now. I mean it really before the tariffs with, with pandemic inflation. Right. And so now am I bitter about the prices, especially in, in fashion? Yes, but I can't say I'm surprised.

[A]

Well, bitter is exactly what I'm saying. It's like when the airlines did this post 911 and they started to reduce the size of what you could bring on a plane, then you had to bring a carry on all the. And then they never changed it no matter what happened. Kind of reminds me of that.

[B]

Although it should also be noted, inflation has not been as high as some were expecting post Liberation Day. I think in, in January it was 2.4% year over year. That's, that's, you know, higher than, a little higher than maybe the Fed wants it to be. But that's not runaway prices. You know, there hasn't necessarily been that sticker shock.

[A]

Well, you're talking yourself out of that refund, Brian.

[C]

I will, I will also point out that in clothing, if you look back like historically, like going back decades, like clothing itself has not kept PA with like regular inflation and the rest of the economy. So we're, we're still paying like relatively low prices for clothing even as, you know, brands might be jacking up prices a bit now, which still doesn't feel great as a consumer.

[B]

But you know, Mark's message is you will pay high prices and you will like it.

[D]

I mean, yeah, there's something to be said about paying more and buying less. Right.

[C]

Ideally that's what would happen.

[D]

Yeah. It's not necessarily, I think the missing piece is that quality piece pricing is going to be a huge topic this year, but not only because of tariffs, because the way that consumers have shifted in how they're buying stuff has changed, has evolved in the past couple of years. Whereas before, I think we used to have more blind fanaticism of certain brands and especially in luxury, we've lost a lot of that one because things have become really expensive. And there's been some powerful questions around whether these price increases are warranted by the quality of these products. And also too, even though consumer spending has been extremely resilient in the U.S. it's complicated because that's not been the case for everybody. And so we are all the, the pandemic inflation hangover is still happening. The grocery bills are higher, rent is much, much higher in New York City at least. And so there's also that bit of like spending is just stretch period. And so all of these factors combined means that the consumer is just more picky than ever. And how you factor in your pricing in relation to the perception of your brand is going to be really delicate.

[B]

Why don't we close things out with a lightning round where each of us says where we think this is all headed. You can interpret that any way you want, whether, meaning tomorrow or five years from now or anything in between. Mark, why don't you start?

[C]

It's going back to court. Whatever it is, it'll be back in court at some point.

[B]

I'll go next. I think, I agree it's going back to court, but I also think the trajectory overall is going to be toward lower tariffs. Not where we were pre Trump, but I think the era of Trump threatening 50% tariffs on India or threatening to, you know, essentially cut off imports of French champagne are basically over. And the reality that we're seeing this week is closer to the long term reality that we'll see.

[A]

I would sort of double down on what Brian just said. And so, and what I was asking earlier, which is I think that anytime Trump gets a significant thumbs down, like one from the Supreme Court to something that he's threatened and made good on, I think that's really significant in this political climate. So I think even though things will be back in court and they will not be exactly as retailers may have wanted it, it will be, I think, better than expected in the realm of tariffs. Like we can't get any worse.

[D]

Yeah, I would agree with that. I was going to say that the Democrats are going to have great midterm elections. Am I allowed to say that on here?

[B]

Of course.

[D]

It's just a prediction, you know, not a personal opinion or of political opinion at least.

[A]

Well, it's bad press. And that is there's, there are few things that Trump likes worse than bad press. So there we go.

[C]

I agree on the tariffs point, by the way, just because every other lever that I've seen that he can pull is limited compared to the, the illegal emergency tariffs that he used. So, you know, they'll require, they'll be in place for a certain time. They won't be as high. They'll require some investigation and approval from Congress at some point. I just, I agree with, you know, both of you guys. It's, it's not going back.

[A]

So, Kat and Mark, thank you so much for joining us today. This was very informative. We appreciate your insights.

[D]

Thank you for having us.

[C]

Thanks. Always a pleasure to join.

[A]

Please be sure to check out Mark and Kat's ongoing coverage of businessofashion.com these& other stories are available to BOF Professional subscribers only, and you can find the links in the episode notes. You've been listening to the debrief, produced and edited by Olivia Davies and Eric Ria. I'm Sheena Butler Young.

[B]

And I'm Brian Baskin. We'll be back next week with a new episode. Thanks so much for joining us and be sure to follow us wherever you get your podcasts.

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