Circular Fashion Faces Its Own Challenges Under Trump’s Tariffs
By Flawless Magazine
In theory, tariffs should bolster domestic industries. In reality, they may be entangling the already fragile growth of circular fashion in red tape and rising costs. As former President Donald Trump reasserts his protectionist trade agenda—including plans for a 10% across-the-board tariff and targeted levies on Chinese goods—circular fashion players in the U.S. are sounding the alarm.
The logic behind tariffs is clear: protect American manufacturing, revive the garment industry, and reduce dependence on low-cost imports that fuel fast fashion and textile waste. But for circular businesses—those operating resale, repair, rental, recycling, and remanufacturing models—the impact is far more complex.
When Tariffs Collide with Circular Principles
Circular fashion hinges on reuse, longevity, and local reinvention. But it also relies on global inputs: secondhand textiles, refurbished materials, and machinery sourced from abroad. Many of these inputs are not made domestically at scale. New tariffs, especially on imports from China (a major supplier of recycled textiles and industrial refurbishing equipment), could inadvertently make it more expensive to operate sustainably.
Take the case of For Days, a U.S.-based circular fashion brand known for its closed-loop system. CEO Kristy Caylor explains: “We’re trying to build an infrastructure for garment takeback and regeneration in the U.S., but we’re still dependent on certain machinery and recycled yarns that we source globally. Tariffs just inflate our costs without offering viable domestic alternatives.”
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Small Businesses, Big Squeeze
Unlike major retailers who can absorb price fluctuations, small circular fashion businesses often run on razor-thin margins. Brands like The Renewal Workshop, FABSCRAP, and Trove rely on specialized inputs—textile sorters, hardware for takeback kiosks, or even imported upcycled fabrics—that may fall under broad tariff codes. These items weren’t designed with circular systems in mind, and current trade policies fail to distinguish between sustainable and unsustainable imports.
“It’s a double bind,” says Maxine Bédat of the New Standard Institute. “Tariffs might reduce the flood of cheap, disposable clothing. But if they also make it harder to repair or reuse clothing affordably, we’re not solving the problem—we’re relocating it.”
Secondhand Supply Chains Disrupted
One of the biggest ripple effects of tariff expansion could be on secondhand and deadstock supply chains. Many circular brands rely on importing bulk used garments or surplus inventory from international markets. Trump’s prior tariffs—many of which could return or expand under a second term—made it costlier to bring in these materials, classifying them alongside new garments.
Platforms like ThredUp and Poshmark have adapted by prioritizing domestic sourcing, but this narrows inventory diversity and increases competition. Meanwhile, charitable organizations that export surplus donations to overseas circular projects face new scrutiny and border complications.
Missed Opportunities for Infrastructure
Rather than punishing imports, industry advocates argue that the U.S. should invest in domestic infrastructure for textile collection, sorting, and recycling. The American Circular Textiles Act, still in committee, proposes grants and tax credits for sustainable fashion businesses. But without broader political will—and with trade dominating the conversation—many fear circularity will get sidelined.
“There’s a path where tariffs are paired with industrial strategy,” says Lewis Perkins, President of the Apparel Impact Institute. “But what we’re seeing is blunt instruments with no plan to foster the domestic capacity needed to make circularity viable.”
The Global Implications
Circular fashion is not an isolated ecosystem. It’s built on transnational collaboration: European tech, Asian textile innovation, American logistics. If trade policies become increasingly nationalistic, the flow of ideas, materials, and best practices could suffer.
U.S.-based brands that export upcycled garments or refurbished fashion pieces also risk facing retaliatory tariffs abroad, reducing their competitive edge. In the long run, this could stall the movement toward a truly global circular economy.
What Needs to Change
If the U.S. is serious about reducing fashion waste and becoming a leader in circularity, its trade policy must reflect that ambition. Recommendations from industry experts include:
- Tariff exemptions for circular economy-related inputs such as recycled textiles, repair tools, and remanufacturing equipment.
- Clear customs classifications that distinguish used goods and sustainable materials from new fast fashion imports.
- Federal funding for domestic circular infrastructure, from sorting facilities to textile-to-textile recyclers.
- A coherent industrial strategy that aligns tariffs with circular innovation goals.
Until then, circular fashion in the U.S. remains in a precarious position: lauded for its sustainability promise, yet hampered by policies that fail to support its needs.
As the trade debate reignites, the question becomes: will circular fashion be treated as an afterthought, or as a central pillar of America’s sustainable future?
Because the future of fashion shouldn’t just be Made in America—it should be Remade in America.
