Reciprocal tariffs are calculated as the tariff rate necessary to balance bilateral trade deficits between the U.S. and each of our trading partners. This calculation assumes that persistent trade deficits are due to a combination of tariff and non-tariff factors that prevent trade from balancing. Tariffs work through direct reductions of imports.
Reciprocal tariff rates range from 0 percent to 99 percent, with unweighted and import-weighted averages of 20 percent and 41 percent.
The US has just announced the levies it will charge on countries through so-called reciprocal tariffs, with apparel producing countries with significant exports to the US such as China, Cambodia, Bangladesh, Vietnam, Malaysia and India all facing steep charges on their exports – which will come into effect within hours.
Goods from Vietnam — the second-biggest apparel exporter to the US after China — will be subject to a 46% tariff, Cambodia will have a 49% duty and Bangladesh 37%. China will be subject to a new 34% tariff on top of the previously announced duties, raising its tariff rate to 54%, and the EU will be hit with a 20% duty.
In a statement issued Wednesday, the association said, “the fashion industry depends on global supply chains more than perhaps any other sector of manufactured goods.
“While tariffs can be a useful tool in addressing unfair trade practices, they disproportionately impact the fashion industry. U.S. imports of textiles and apparel are subjected to some of the highest tariff rates. For example, in 2024, the average tariff on steel was 5%, while the average tariff on apparel was a staggering 14.6%.”
Despite these high tariffs, the association said, “the percentage of apparel made in the U.S. remains just 3%. The textile and apparel industry has been paying higher tariffs for decades with little impact on reshoring manufacturing.”
The imposition of US tariffs presents both opportunities and challenges for the Indian textile industry. On the positive side, higher tariffs on competing nations provide India with a competitive edge, potentially increasing its market share in the US. In 2023-24, out of approx. $36 billion of textiles exports, the US accounted for nearly 28%, amounting to approximately $10 billion. This favourable position could lead to increased export volumes and revenue for Indian manufacturers.