Higher Clothing Prices Are Officially Here

US President Donald Trump’s trade war has officially made landing at the checkout line.

Apparel prices rose 0.4 percent between May and June, according to the US Bureau of Labor Statistics, the first month-on-month increase in the category since March. After raising prices in the wake of the pandemic, the fashion industry had been reluctant to implement further hikes, even in the wake of Trump’s “Liberation Day” announcement in April of the highest tariffs in a century.

Those days appear to be over. Rising clothing prices came amid a broader uptick in inflation, which hit 2.7 percent at an annual rate in June, the highest since February, according to the BLS data.

Higher inflation was widely expected, as many of the goods entering the country after Trump’s tariffs went into effect are just starting to hit shelves. For now, importers are paying a 10 percent across the board tariff, as well as higher rates on goods from China and a handful of other countries, as well as certain commodities. More, and higher tariffs are scheduled to kick in on Aug. 1 for countries that fail to reach trade agreements with the Trump administration (Indonesia was the latest to do so on Tuesday, agreeing to a 19 percent tariff).

Even if tariffs remain at current levels, more price increases are likely. In late summer and early autumn, even more tariff-affected merchandise will be in circulation. Some fashion and beauty brands delayed the pain, pulling forward merchandise and stocking up ahead of their impact, but will soon need to replenish their inventory. Others have already announced price hikes that are yet to come into effect.

Beauty brands including E.l.f., Glow Recipe and the Inkey List announced $1 price hikes, with E.l.f.’s set to go into effect in August. Nike, Steve Madden, Michael Kors-owner Capri and Coach owner Tapestry are all rolling out their own selective rounds.

It’s not just the industry’s own price hikes that matter but business, but how expensive everything else gets — and how pinched consumers’ wallets are as a result. Gasoline prices, in particular, tend to have a close correlation with how much people spend on apparel, for example. Both fuel and electricity prices were up this month.

So far, consumer spending has held up relatively well, even as shoppers tell pollsters they plan to cut back. However, many in the fashion industry fear that demand will fall quickly as prices rise. Some point to Amazon’s mixed performance during its Prime Day sale last week as evidence – sales fell 40 percent year over year on day one of the sale, though the e-commerce giant set a record over the four-day event.

Now, all eyes are on back-to-school shopping.