In a significant move affecting international trade and the fashion industry, President Donald Trump has imposed a baseline 10% tariff on imported goods from all countries, a decision that has raised eyebrows and concerns among business owners across various sectors. Among those voicing their apprehensions is Andrew Chen, the founder of the New York City-based fashion brand 3sixteen, who took to TikTok to discuss how these tariffs could fundamentally alter his business model.

These tariffs were announced on April 2 and have had varying impacts on different countries. For instance, the European Union is facing an increased tariff rate of 20%, while Vietnam and Lesotho are being subjected to even steeper charges of 46% and 50%, respectively. Notably, the tariffs on goods from China have escalated from an existing 20% to an astonishing 54%, significantly affecting the cost structure for many businesses reliant on these imports.

Founded in 2003, 3sixteen specializes in high-quality menswear basics, particularly known for its premium Japanese denim jeans that retail for between $300 and $400. The brand has established two retail locations—in New York and Los Angeles—where it caters to a niche market that values craftsmanship and quality. Chen's expertise in sourcing materials plays a crucial role in the brand's identity, making the recent tariff alterations particularly concerning for him.

Chen outlined three primary effects the tariffs could have on his operations. First and foremost, he expects a noticeable increase in costs, especially as his brand relies heavily on materials imported from regions now subjected to these tariffs. Specifically, 3sixteen imports denim from Japan, India, and the European Union, with a heavy reliance on Portuguese textiles. With Japan now facing a 24% tariff, Chen expressed his worries about how this would affect his sourcing strategy.

“We’re most concerned about Japan because all of our denim is woven there, and then it’s brought over to the States where we cut and sew them into jeans and jackets,” Chen explained during his TikTok video. In a typical example of how tariffs can ripple through an industry, he noted that a $10 increase in raw materials could ultimately lead to a $50 hike in retail prices. “When it gets to retail, somebody has to pay the cost,” he said, adding that the brand might have to either absorb the cost, pass it on to consumers, or find a middle ground.

Chen is currently grappling with a shipment of denim scheduled to arrive from Japan shortly after the tariff implementation. “It got put on that boat a month ago, but because it is landing three or four days after the tariffs take effect, we will be liable to pay additional higher tariffs on that shipment,” he noted, highlighting the confusion this situation causes for business owners.

Another key issue raised by Chen is the uncertainty that comes with these tariff changes. He pointed out that he experienced heightened uncertainty earlier in the year when Trump introduced 25% tariffs on goods from Canada and Mexico, only to later roll back the measures for certain items. During that time, Chen faced a period where he was unsure if he would have to deal with a 25% increase on materials sourced from Canada, where 3sixteen also obtains its Jersey fabric and fleece.

Moreover, Chen expressed concerns about how these tariffs might negatively impact 3sixteen's overseas market presence. Retailers outside the United States may hesitate to stock American brands, fearing the added costs that would be passed on to consumers. Chen recalled facing similar challenges during Trump's first term, where trade tensions with the EU led to retailers reconsidering their purchasing decisions. “It resulted in a lot of stores liking the brand, having bought it for many years, but needing to reconsider their buys, maybe not even stocking the brand outright because it was just getting too expensive,” he lamented.

Chen's apprehensions reflect a broader trend within the retail industry, where major corporations like Best Buy, Target, and Walmart have already indicated that product price increases are unavoidable in the face of these new tariffs. In earlier conversations, small business owners also shared their strategies for bracing for impending tariffs, such as stockpiling inventory and placing advance orders.

The ripple effects of Trump's tariffs are becoming increasingly pronounced, and as Chen and many others navigate this new terrain, the fashion industry waits to see just how these economic decisions will shape their future.