"The global fashion industry is bracing for 2026, navigating a market defined by geopolitical instability, macroeconomic uncertainty, and, above all, unprecedented U.S. tariffs. As leaders pivot from focusing on "uncertainty" to acknowledging the environment is simply "challenging," tariffs have emerged as the number one hurdle facing executives. The severity of the trade landscape cannot be overstated, executives told McKinsey and the Business of Fashion for the 2026 edition of the "State of Fashion" report."
"U.S. tariffs on apparel and footwear imports, which had been around 13% earlier in 2025, dramatically spiked to 54% following initial government announcements in April. Although rates later eased, the weighted average tariff rate for apparel and footwear from the top 10 importers stood at 36% as of mid-October, well above historical norms. This sudden surge places the apparel and footwear industry among those most exposed to the tariffs' profound impacts."
"For the 10th anniversary of the report, which began in 2016, McKinsey and Business of Fashion charted the many changes for the industry since 2016, from a generalized "age of volatility" to Asia's undeniable rise to disruptions in how shoppers shop. For 2026, they chart major issues, including "tariff turbulence" and three emergent shopper appetites: a focus on resale, a sense of "wellbeing" in their purchases, and a future marked by artificial intelligence (AI)."
Geopolitical instability, macroeconomic uncertainty, and sharply higher U.S. tariffs are reshaping the global fashion market heading into 2026. Tariffs on apparel and footwear jumped from about 13% earlier in 2025 to a weighted average near 36% by mid-October after peaking at 54%, significantly raising import costs. Seventy-six percent of executives identify trade disruptions and tariffs as the single most important industry factor for 2026. Brands are adjusting prices, shifting sourcing, and boosting efficiency. Larger suppliers are optimizing footprints and pursuing digitization and automation. Smaller players face mounting pressure. Shopper trends include rising interest in resale, wellbeing-focused purchases, and adoption of AI.
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